The U.S. Has More Individually Owned Businesses than Corporations

January 13, 2014

What sets the entrepreneurial middle class apart from other taxpayers is that they derive a large share of their overall earnings from pass-through businesses such as S corporations, LLCs, and partnerships. These pass-through business owners pay their business taxes on their individual tax returns. Since the 1980s, the number of traditional C corporations has shrunk while the total number of pass-through businesses such as S corporations, partnerships, and sole proprietorships has tripled to over 30 million in total. Today, there are 1.7 million traditional C corporations, compared to 7.4 million partnerships and S corporations, and 23 million sole proprietorships.

For more charts like the one below, see the second edition of our chart book, Putting a Face on America's Tax Returns.

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