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S Corps and Income Inequality

Much of today’s tax policy debate is premised on the notion that income inequality is bad and getting worse. Economists Piketty and Saez have published numerous papers making this case (here, and here), and Saez recently wrote a book arguing for a wealth tax to address this inequality. But what if their premise is simply wrong? What if the whole income inequality narrative itself is built on a faulty foundation? It’s been known for a long time that Piketty’s and Saez’s estimates fail to fully account for missing income sources, shrinking households, and the effects of tax policy on reported ...

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S Corps and Income Inequality2019-10-31T20:15:14+00:00

EY on Tax Parity

EY has published a new study commissioned by the S Corporation Association entitled “Large S Corporations and the Tax Cuts and Jobs Act: The economic footprint of the pass-through sector and the impact of the TCJA.”  The study’s author, Robert Carroll, will be featured at the Main Street briefing today held in the Russell Senate Office Building.  You can read the full study here. Key takeaways from Bob’s work include: Pass-Through Tax Parity: In terms of both effective and marginal tax rates, the analysis shows that prior to TCJA, large S corporations and C corporations faced similar tax rates. Rough ...

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EY on Tax Parity2019-10-25T18:43:24+00:00

Main Street Hill Briefing

The Parity for Main Street Employers coalition and the S Corporation Association will host a Hill lunch briefing at noon on October 24th in the Kennedy Caucus Room (SR-325). The briefing is open to Hill staff and tax professionals, and will focus on the pass-through sector and how it has fared under tax reform.  Speakers include Senator Steve Daines (MT), Marty Sullivan with Tax Analysts, Bob Carroll with EY, and David Winston with the Winston Group.  Box lunches will be provided. You can see the official event flyer here.  To RSVP, please contact us at admin@s-corp.org.

Main Street Hill Briefing2019-10-17T16:08:54+00:00

Perception v. Reality on Tax Rates

Here’s a conundrum.  A recent poll revealed that 76 percent of Americans support increasing taxes on the “wealthy,” while sixty-one percent support the wealth tax proposed by Senator Elizabeth Warren, which is like an income tax, only at ridiculously high rates. But polls also show Americans consistently oppose high tax rates, even on the wealthy.  This summer, for example, the Winston Group asked registered voters: “For each of the following, what is the maximum rate at which you think they should be taxed?”  ...[T]he average responses were all consistently low, ranging from a high of 31 percent for the wealthy ...

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Perception v. Reality on Tax Rates2019-09-09T15:44:51+00:00

Failure of High Marginal Rates

Earlier this year, the Congressional Budget Office produced a report reviewing tax rates on labor income since 1962 that includes some important lessons for tax policy folks. The first lesson is that nothing replaces a really cool chart.  Take this heat map, for example.  What a great way to convey a lot of information all at once.  If you’re a taxpayer, the simple way to view it is lighter colors good, darker colors baaad. Our second lesson is how much more progressive the tax code has become since the 1960s.  Back then, nearly everybody paid statutory rates between 16 and ...

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Failure of High Marginal Rates2019-08-28T16:43:54+00:00