Oops, maybe I wasn't clear - the tax dodge here is you form an S-corp, and take all your payments through said S-corp (the S-corp doesn't hold onto any more cash than is necessary). Before, a top earner would pay ~39% marginal income tax. But by routing all your income through the S-corp your effective income tax rate drops to 15%, a nearly 25% marginal tax rate cut for top earners. Or am I missing something?
As I understand it, Trump's tax plan changes this so that S-corp income is only taxed at the 15% rate:
> Right now, freelancers, sole proprietors, unincorporated small businesses and pass-through entities are taxed at the high personal income tax rates. [...] The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate
> Right now, freelancers, sole proprietors, unincorporated small
businesses and pass-through entities are taxed at the high personal income tax rates. [...] The Trump plan addresses this challenge head on with a new business income tax rate within the personal income tax code that matches the 15% corporate tax rate
Huh. That's super weird. What's the difference between an S-Corp and a C-Corp then? I agree that this part of the plan is dumb (Trump proposes a dumb thing! News at 11!). I can't imagine that this part of the proposal will get anywhere.
