Sign up for a daily newsletter defining what matters in business and markets

Stories

Pass-through filers do better than wage earners in Senate tax bill

Under the Senate-passed tax bill, people with pass-through income would see bigger increases in their after-tax income in 2019 than people paying taxes only on wages and salaries, according to a Tax Policy Center analysis. Generally, the wealthier a filer with pass-through income is, the better off they are under the bill.

Reproduced from Tax Policy Center; Chart: Axios Visuals

Be smart: The Senate bill allowed pass-throughs to deduct 23 percent of business income, whereas the conference report will likely lower this to 20 percent while also lowering the top individual income rate.

The bottom line: While this is unlikely to drastically reshape the findings of the TPC analysis, the fact that analysts can't keep up with the GOP's speed in writing and passing updated tax legislation underlines how much we still don't know about the bill's impact.