WSJ: GOP tax reform bill will leave high wage earners with little to no gain

quote:

---

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.

---

quote:

---

The emerging Republican plan would "open a gulf between wages and pass-through business income that has never existed before, putting the high-wage earners at a disadvantage," said Andy Mattson, a certified public accountant with Moss Adams in Campbell, Calif.

Keeping the top tax rate on wages near 39.6% would be a way for Mr. Trump to defend his argument that he isn't prioritizing tax cuts for the rich, even if other pieces of the tax plan favor wealthy business owners, investors or heirs of large estates.

---