![]() ![]() Of the 26 million businesses in 2014, 95 percent were pass-throughs, while only 5 percent were C-corporations. approach to taxing business.Ĭlick on each fact to jump to its discussion. To help understand the policy considerations surrounding the taxation of pass-through businesses and the implications of potential reforms, here are nine facts about pass-throughs and the current U.S. ![]() Income earned from pass-through business from 39.6 percent to 15 percent. For instance, the Trump tax plan proposes reducing the corporate tax rate from 35 percent to 15 percent and the top tax rate on business income, range in size and complexity, and operate economy-wide in a variety of industries, they represent unusual challenges to tax reform.īoth the Trump administration and the 2016 House Republican tax reform plan propose large reductions in taxes paid on business income, including taxes paid by owners of pass-through businesses. Because these businesses’ decisions are affected by both corporate and individual tax systems, earn a Pass-through businesses include sole proprietorships, partnerships, and S-corporations. Rather, most businesses-about 95 percent-are “pass-throughs,” which have their income “pass through” to their owners to be taxed under the individual income tax. are not C-corporations subject to the corporate tax. The overwhelming majority of businesses in the U.S. ![]()
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