No. of Recommendations: 2
The article I posted about the book:
npr.org - The powerful millionaires hiding in plain sighttalks about pass-through businesses:
But as the Ninjas kicked and sliced through millions of tax records, they discovered an even bigger bombshell: pass-through businesses were crucial to understanding the rise of inequality in America.
In fact, Zwick says, since the 1980s, pass-through businesses have accounted for more than half of the rise in the top one percent's share of income. The same goes for the top 0.1 percent.
Who are these millionaires?
Having realized that the rise of pass-through businesses was crucial to understanding why more and more of income was flowing to the top, the Ninjas next asked: where were all of these profits coming from? What kinds of industries were blasting these business owners into the financial stratosphere?The pass-through business income tax deduction (QBI) didn't start until 2018, with the Tax Cuts and Jobs Act. That is a powerful deduction. Prior to that, as far as I know there was no economic advantage was to this structure for a small business. I did it because it was simple. I was often told I should use a corporation structure instead to save on taxes. The corporation would pay me a small salary, large dividends, and make zero profit, so zero corporate tax. Saves on self-employment tax, too.
