Business in the United States: Who Owns it and How Much Tax Do They Pay? / Michael Cooper, John McClelland, James Pearce, Richard Prisinzano, Joseph Sullivan, Danny Yagan, Owen Zidar, Eric Zwick.

Format:

Book

Author/Creator:

Cooper, Michael.

Contributor:

National Bureau of Economic Research.

McClelland, John.

Pearce, James (Economist)

Prisinzano, Richard.

Sullivan, Joseph.

Yagan, Danny.

Zidar, Owen.

Zwick, Eric.

Series:

Working Paper Series (National Bureau of Economic Research) no. w21651.

NBER working paper series no. w21651

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Business in the United States

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2015.

Summary:

"Pass-through" businesses like partnerships and S-corporations now generate over half of U.S. business income and account for much of the post-1980 rise in the top- 1% income share. We use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. We present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) Partnership ownership is opaque: 20% of the income goes to unclassifiable partners, and 15% of the income is earned in circularly owned partnerships. (3) The average federal income tax rate on U.S. pass- through business income is 19%|much lower than the average rate on traditional corporations. If pass-through activity had remained at 1980's low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28% rather than 24%, and tax revenue would have been approximately $100 billion higher.

Notes:

Print version record

October 2015.