Cutting Tax Rate on "Small Business" Pass-Through Income
1. National Data Shows Few Taxpayers Own a
B Fid S ll B i With E lBona Fide Small Business With Employees
4/29/2013
2. A l i f “S ll B i ”Analysis of “Small Business”
Proposal at State Level:Proposal at State Level:
Flat 6.6 Percent Tax on
Schedules C and E
Business Income
4/29/2013
3. Flat 6.6% Rate for Business Pass-Thru IncomeFlat 6.6% Rate for Business Pass Thru Income
Share of Taxpayers with Tax Increase
4%
5%
p y
3%
%
1%
2%
0%
Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next 15% Next 4% Top 1%
20% 20% 20% 20%
4/29/2013
Source: Institute on Taxation and Economic Policy, April 2013
4. Flat 6.6% Rate for Business Pass-Thru IncomeFlat 6.6% Rate for Business Pass Thru Income
Average Tax Increase for Those with Increase
$4,101
$4,000
$5,000
g
$2,587$3,000
$ ,
$518
$1,121 $1,257
$1,000
$2,000
$64
$290
$518
$0
Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next 15% Next 4% Top 1%
20% 20% 20% 20%
4/29/2013
Source: Institute on Taxation and Economic Policy, April 2013
5. Flat 6.6% Rate for Business Pass-Thru IncomeFlat 6.6% Rate for Business Pass Thru Income
Share of Tax Increase
48%50%
60%
27%30%
40%
8% 8% 6%10%
20%
1%
6%
2%
0%
10%
Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next 15% Next 4% Top 1%
20% 20% 20% 20%
4/29/2013
Source: Institute on Taxation and Economic Policy, April 2013
6. Flat 6.6% Rate for Business Pass-Thru IncomeFlat 6.6% Rate for Business Pass Thru Income
Share with Tax Cut
59%
50%
60%
23%
38%
30%
40%
4%
7%
14%
23%
10%
20%
2% 4%
7%
0%
10%
Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next 15% Next 4% Top 1%
20% 20% 20% 20%
4/29/2013
Source: Institute on Taxation and Economic Policy, April 2013
7. Flat 6.6% Rate for Business Pass-Thru IncomeFlat 6.6% Rate for Business Pass Thru Income
Average Tax Cut for Those with Cut
-$10 -$88 -$127 -$154 -$370
-$1 391-$2 000
-$1,000
$0
g
$1,391
$5 000
-$4,000
-$3,000
-$2,000
-$7,000
-$6,000
-$5,000
-$7,648
-$9,000
-$8,000
Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next 15% Next 4% Top 1%
20% 20% 20% 20%
4/29/2013
Source: Institute on Taxation and Economic Policy, April 2013
8. Flat 6.6% Rate for Business Pass-Thru IncomeFlat 6.6% Rate for Business Pass Thru Income
Share of Tax Cut
50%
60%
30%
40%
10%
20%
0%
10%
Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next 15% Next 4% Top 1%
20% 20% 20% 20%
4/29/2013
Source: Institute on Taxation and Economic Policy, April 2013
9. Flat 6.6% Rate for Business Pass-Thru IncomeFlat 6.6% Rate for Business Pass Thru Income
Average Tax Change
$1 $4
-$1
$4
$21
$0
$1,000
g g
-$1 -$21
-$492
-$2,000
-$1,000
-$4 000
-$3,000
-$4,504-$5,000
$4,000
Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next 15% Next 4% Top 1%
20% 20% 20% 20%
4/29/2013
Source: Institute on Taxation and Economic Policy, April 2013
10. Flat 6.6% Rate for Business Pass-Thru IncomeFlat 6.6% Rate for Business Pass Thru Income
Tax Change as a Share of Income
—
+0.1%
g
–0.2%
–0.1%
0 5%
–0.4%
–0.3%
–0.6%
–0.5%
Lowest
20%
Second
20%
Middle
20%
Fourth
20%
Next 15% Next 4% Top 1%
20% 20% 20% 20%
4/29/2013
Source: Institute on Taxation and Economic Policy, April 2013
