Alexis Leondis
Bloomberg Opinion
President Joe Biden proposes to impose steep new taxes on high earnings and lucrative investments to help pay for expanded child care and other social programs. But if heâs serious about requiring wealthy Americans to pay more, he missed one of the most obvious places to start.
That would be by curtailing a gift to business owners granted by the 2017 Republican tax law: a special deduction that gives owners of partnerships and limited-liability companies a way to pay less than others who earn just as much money.
Business owners are allowed to deduct up to 20% of the income they receive from a pass-through business (so-called because the businesses profits pass through to owners directly and are taxed at the individual level) from their overall taxable income. That means a marginal tax rate as low as 29.6% instead of 37% for the highest earners.