Much of the growth in business income since 1980 has come from pass-through businesses. Pass-throughs now earn over 60 percent of all net business income. In 2011, pass-throughs earned $1.3 trillion in business income compared to around $800 billion earned by corporations.
Corporations saw a huge collapse in their income following the financial market crash, falling from nearly $1.3 trillion in 2007 to $450 billion in 2008.
Kyle Pomerleau is a resident fellow at the American Enterprise Institute (AEI), where he studies federal tax policy.
Before joining AEI, Mr. Pomerleau was chief economist and vice president of economic analysis at the Tax Foundation, where he led the macroeconomic and tax modeling team and wrote on various tax policy topics, including corporate taxation, international tax policy, carbon taxation, and tax reform.