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Why the GOP’s Tax Plan Could Leave High-Wage Earners With Little to Gain


WestVirginiaRebel

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WestVirginiaRebel
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WASHINGTON—Today, a business owner making $500,000 gets taxed much like a corporate executive with a $500,000 salary. How they make their income doesn’t matter much.

That could change dramatically under Republican plans aimed at driving down tax rates on business income, leaving high-income wage earners with much less to gain from a tax overhaul.

Republicans, eager to drive down business tax rates in a bid to boost economic growth, want roughly similar tax rates for corporations and for so-called pass-through firms that report business income on the individual tax returns of their owners.

 

For them, lowering the 35% corporate tax rate requires also lowering the 39.6% top rate for pass-through business income, even though creating a new special rate for that business income leaves a potentially large gap with the top rate for high-income wage earners.

The exact contours of the GOP tax agenda aren’t set. Top lawmakers and administration officials say they will release another blueprint in the coming days.

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When a plan isn't a plan?

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