Via
The Atlantic:
Take a wild guess which column Donald Trump would be The whole, tax break for pass-through income is ridiculous. Pass-through entities were set up to avoid corporate income taxes. Now they get treated at the state level in several cases, and in this proposal at the federal level, as somehow better than wage income, which is stupid. Why should I as a farmer and a member in a farm partnership pay less in taxes on that income than I do for schlepping away at my town job working for The Man? What if I became a contractor for the company I work in town for, and get paid through a pass-through entity. This example of how that works is a doozy:
Take a real world example.
The state of Kansas does not tax pass-through income, and its
highest-paid public employee, Bill Self, the coach of the University of
Kansas basketball team, is paid $4.8 million per year through an LLC.
Under current federal law, a typical head of household earning $4.8
million might have to give more than a third of his income, or about $1.8 million,
to the IRS. Under Trump's plan, somebody like Bill Self could save
about $1 million in taxes by setting up a pass-through business, thus
paying the same marginal rate as a household making about $50,000.
The highest-paid public employee in the state has his salary paid to an LLC, and thus he pays zero dollars in state income tax. Brilliant, Sam Brownback, brilliant. It just blows me away that so many people who are struggling to get by are more than happy to support a billionaire who is going to massively cut his own taxes while destroying the federal budget. And those same struggling people will get negative returns once budget cuts to stem massive deficits are factored in.
