[quote=harvey]
Pass-through income capped at 25% is a big win for top income earners. It will be interesting to see how many executives become consultants instead of employees.
[/quote]
It is not a tax cut for top income earners. Almost just the opposite. It is a tax cut for those with large amounts of capital invested.
This is a pretty complicated section of the law, as written. At least, if not more complicated than the §469 passive loss limitation rules that came in during the mid-80’s. It appears that it won’t lower tax for executives becoming consultants. It will lower tax for investors in big businesses structured as pass-through entities. It will only lower tax on investment income from operating businesses, not income from labor.
It won’t lower tax for real small businesses. The plumber next door that wants to buy a 2nd truck and hire a 2nd crew, or a 10th crew, isn’t going to get much benefit. Doctors, lawyers, consultants, real estate professionals, in private practice won’t get any advantage. It is truly a capital over labor tax preference. Any politician who describes it as a tax break for small business owners is out and out lying. It is anything but that.
If passed, it will exacerbate income inequality. The rich will get richer. The workers will suffer. With all due respect to someone here who correctly hailed swamps as centers of life, this is the exact opposite of the draining of the swamp that Trump campaigned on.
