Tax Policy Center

Options for Taxing-Pass Through Income at Prefential Rates (May 2017)

Business Taxes: Revenue Tables

Table shows the revenue effects of implementing options for taxing pass-through income at preferential rates for fiscal years 2018-27. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. These estimates include the effects of microdynamic responses. 

May 15, 2017
Business Taxes: Distribution Tables by Dollar Income Class

Table shows the distributional effects of implementing a 15-percent top rate on qualifying pass-through income by expanded cash income level in 2018. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. Under the alternative, qualifying pass-through income would be 100 percent of Schedule C/F, partnership, and rental income; and all S corporation profits. These results do not include the impact of income shifting.  

May 15, 2017
Business Taxes: Distribution Tables by Percentile

Table shows the distributional effects of implementing a 15-percent top rate on qualifying pass-through income by expanded cash percentile level in 2018. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. Under the alternative, qualifying pass-through income would be 100 percent of Schedule C/F, partnership, and rental income; and all S corporation profits. These results do not include the impact of income shifting.  

May 15, 2017
Business Taxes: Distribution Tables by Dollar Income Class

Table shows the distributional effects of implementing a 25-percent top rate on qualifying pass-through income by expanded cash income level in 2018. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. Under the alternative, qualifying pass-through income would be 100 percent of Schedule C/F, partnership, and rental income; and all S corporation profits. These results do not include the impact of income shifting.  

May 15, 2017
Business Taxes: Distribution Tables by Percentile

Table shows the distributional effects of implementing a 25-percent top rate on qualifying pass-through income by expanded cash income level in 2018. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. Under the alternative, qualifying pass-through income would be 100 percent of Schedule C/F, partnership, and rental income; and all S corporation profits. These results do not include the impact of income shifting.  

May 15, 2017
Business Taxes: Distribution Tables by Dollar Income Class

Table shows the distributional effects of implementing a 15-percent top rate on qualifying pass-through income by expanded cash income level in 2018. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. Under the alternative, qualifying pass-through income would be 30 percent of Schedule C/F, partnership, and rental income; and 100 percent of active S corporation profits. These results do not include the impact of income shifting.  

May 15, 2017
Business Taxes: Distribution Tables by Percentile

Table shows the distributional effects of implementing a 15-percent top rate on qualifying pass-through income by expanded cash income percentile in 2018. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. Under the alternative, qualifying pass-through income would be 30 percent of Schedule C/F, partnership, and rental income; and 100 percent of active S corporation profits. These results do not include the impact of income shifting.  

May 15, 2017
Business Taxes: Distribution Tables by Dollar Income Class

Table shows the distributional effects of implementing a 25-percent top rate on qualifying pass-through income by expanded cash income level in 2018. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. Under the alternative, qualifying pass-through income would be 30 percent of Schedule C/F, partnership, and rental income; and 100 percent of active S corporation profits. These results do not include the impact of income shifting.  

May 15, 2017
Business Taxes: Distribution Tables by Percentile

Table shows the distributional effects of implementing a 25-percent top rate on qualifying pass-through income by expanded cash income percentile in 2018. The baseline is current law with the individual alternative minimum tax (AMT) repealed and individual income tax rates of 12, 25, and 33 percent with the 25 and 33 percent bracket thresholds the same as under current law. Under the alternative, qualifying pass-through income would be 30 percent of Schedule C/F, partnership, and rental income; and 100 percent of active S corporation profits. These results do not include the impact of income shifting.  

May 15, 2017