Source: Inequality.org
by Ignacio Gonzalez, Juan Montecino, Aina Puig, Selin Secil Akin & Mary Hansen
“House Republicans’ tax plan would expand a tax break in the 2017 tax reform for ‘pass-through’ businesses that has overwhelmingly benefited high earners. ‘Pass-throughs’ are entities structured so that profits are not taxed at the business level but instead at the owners’ individual income tax rate. The 2017 Tax Cuts and Jobs Act introduced a 20% deduction for Qualified Business Income (QBI) for pass-through businesses. House Republicans want to extend this tax break and increase it to 23%. Contrary to proponents’ claims that the QBI deduction stimulates economic growth, economic research suggests a more nuanced and challenging reality. Recent analysis from our team at American University’s Institute for Macroeconomic and Policy Analysis (IMPA) reveals that extending or increasing the QBI is likely to exacerbate economic inequality, while delivering no economic benefits in the long run.” [editor’s note: Five co-writers? I wonder who came up with the chorus? – SAT] (05/22/25)
https://inequality.org/article/pass-through-tax-break-inequality-growth/