Tax break for small business??

Dear Editor,

You may have heard about a month ago that the IRS plans to raise an additional $50 billion in revenue over 10 years by closing the pass-through tax loophole. This originally well-meaning tax break for small business owners has been co-opted by rich millionaires. The pass-through tax break lets business owners take a 20% deduction on their income. However, millionaires can easily utilize this tax break intended solely for business owners by claiming they are “consultants” or “independent contractors”, and thus gain this 20% tax deduction on their income, as well.

The Joint Committee on Taxation calculated that the top 1% of earners receive 61% of the money savings this tax break creates, while the bottom 67% of earners receive only 4% of the entire money savings created by this tax break. This tax break is egregiously abused by the ultra-wealthy, who are able to take greatest advantage of the savings.

I originally learned of this tax loophole a year ago when attending Economic Equity Now meetings and reading the book How Lies, Loopholes, and Lobbyists Make the Rich Even Richer. I’m happy to see this loophole explained on page 99 of that book hopefully be closed in the near future, so this aspect is eliminated, which helps many millionaires pay a lower tax rate than the average salaried worker.

Aaron Dettmann

Richland Center, WI