Business Income to Shoulder Over a Third of Tax Increase on Top Earners
Advocates of allowing the top two federal income tax rates to expire claim that only 2 or 3 percent of businesses would be affected, but a new Tax Foundation report shows that more than one-third of the revenue from an increase in the top two rates would come from business income.
About 39 percent of the $630 billion tax increase on high-income taxpayers (defined by President Obama as individuals earning more than $200,000 and married couples earning more than $250,000) in 2011 would come from business income. This amounts to an extra $246 billion in taxes on business income over 10 years.
For more information, see Tax Foundation Special Report, No. 185, “Over One-Third of New Tax Increases to Come from Business Income” or visit the Tax Foundation’s FAQ on the Bush-Era Tax Cuts.
To see how the fate of the Bush-era tax cuts would impact your 2011 federal income tax liability, visit the Tax Foundation’s interactive calculator at www.mytaxburden.org.
Was this page helpful to you?
Thank You!
The Tax Foundation works hard to provide insightful tax policy analysis. Our work depends on support from members of the public like you. Would you consider contributing to our work?
Contribute to the Tax FoundationLet us know how we can better serve you!
We work hard to make our analysis as useful as possible. Would you consider telling us more about how we can do better?
Give Us Feedback