Business Income Would Take Double Hit from New Surtax, Expiring Tax Cuts
Proposed health care surtaxes approved by the House Ways and Means Committee, combined with the reversion of the top federal tax rate on wages to 39.6% at the end of next year would mean “a significant tax hike” on business income in 2011, according to a Tax Foundation Fiscal Fact.
According to Tax Foundation President Scott Hodge, author of the new report:
The U.S. business sector includes millions of “non-corporate” businesses that pay their taxes on the individual income tax returns of their owners. That means new tax hikes on personal income, which may soon bring total rates over 50% in most states, will be hurting small businesses. Some pundits like to cite the statistic that only 4% of the 36 million tax returns with ‘business’ income are subject to the surtax, but that 4% of tax returns earns 60% of the $882 billion in total “business” income.
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