24% TAX CUT FOR PASS THROUGHS: HOW DOES THAT SOUND?

Trump/Republican bill would cut the rate on “pass through” income for “small businesses”.

“…[T]wo-thirds of [pass-through] business income is reported by households making $292,000 or more, and half goes to those making $693,000 or more, the highest income one percent.”

The Trump/Republican plan would lower income taxes on pass-through income by 24%, from 39.6% to 15%.

Who/what are “small businesses”? “Small businesses” include hedge fund managers, financial planners, consultants, lawyers & doctors in private practice; people who have a side-line, i.e. take in some income from side-line jobs while working a full-time job; people who’re are sole-proprietors, e.g. crafts people, artisans, landscapers, etc.

So, who benefits by reducing tax rates on pass-through income?

Nine out of ten people with incomes less than $100,000 report only 10% of their income coming from a pass-through business, about $7,300. They would gain about $1,066 annually.

Most claiming pass-through income earn over $693,000 per year.  They would gain $ 101,178 in tax cuts. They are the low-end of the 1% (making $693,000 annually); gains for other 1%’ers would be greater.

Bottomline: “The Trump tax plan as a whole would cost well over $5 trillion over a decade and would cut millionaires’ taxes by at least $250,000 each year, on average,” leaving middle class citizens either another $ 1/2 Trillion per year in debt to pickup or $ 1/2 Trillion per year in lost health care, education, infrastructure, retirement income, etc.

Sources:

http://www.taxpolicycenter.org/taxvox/who-owns-pass-through-businesses-and-who-would-benefit-trumps-plan-cut-their-taxes

https://www.cbpp.org/research/federal-tax/trump-tax-plans-pass-through-tax-break-would-provide-massive-windfall-to-the