Business in the United States: Who Owns It, and How Much Tax Do They Pay?

Business in the United States: Who Owns It, and How Much Tax Do They Pay?. Cooper, M., McClelland, J., Pearce, J., Prisinzano, R., Sullivan, J., Yagan, D., Zidar, O., & Zwick, E. 30(1):91–128, University of Chicago Press.

Paper doi abstract bibtex

“Pass-through” businesses like partnerships and S-corporations now generate over half of U.S. business income and account for much of the post-1980 rise in the top- 1% income share. We use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. We present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) Partnership ownership is opaque: 20% of the income goes to unclassifiable partners, and 15% of the income is earned in circularly owned partnerships. (3) The average federal income tax rate on U.S. pass- through business income is 19%|much lower than the average rate on traditional corporations. If pass-through activity had remained at 1980's low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28% rather than 24%, and tax revenue would have been approximately 100 billion higher.

@article{cooperBusinessUnitedStates2016,
  title = {Business in the {{United States}}: {{Who Owns It}}, and {{How Much Tax Do They Pay}}?},
  author = {Cooper, Michael and McClelland, John and Pearce, James and Prisinzano, Richard and Sullivan, Joseph and Yagan, Danny and Zidar, Owen and Zwick, Eric},
  date = {2016},
  journaltitle = {Tax Policy and the Economy},
  volume = {30},
  number = {1},
  pages = {91--128},
  publisher = {{University of Chicago Press}},
  issn = {08928649},
  doi = {10.1086/685594},
  url = {https://doi.org/10.1086/685594},
  abstract = {“Pass-through” businesses like partnerships and S-corporations now generate over half of U.S. business income and account for much of the post-1980 rise in the top- 1\% income share. We use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. We present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) Partnership ownership is opaque: 20\% of the income goes to unclassifiable partners, and 15\% of the income is earned in circularly owned partnerships. (3) The average federal income tax rate on U.S. pass- through business income is 19\%|much lower than the average rate on traditional corporations. If pass-through activity had remained at 1980's low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28\% rather than 24\%, and tax revenue would have been approximately 100 billion higher.},
  keywords = {Wealth Taxation},
  file = {C\:\\Users\\lukis\\AppData\\Roaming\\Zotero\\Zotero\\Profiles\\h20ej2eu.default\\zotero\\storage\\4NUIVKVG\\Cooper et al_2016_Business in the United States.pdf}
}

Downloads: 0

{"_id":"Phn8fc8fyQ6nxKubo","bibbaseid":"cooper-mcclelland-pearce-prisinzano-sullivan-yagan-zidar-zwick-businessintheunitedstateswhoownsitandhowmuchtaxdotheypay","author_short":["Cooper, M.","McClelland, J.","Pearce, J.","Prisinzano, R.","Sullivan, J.","Yagan, D.","Zidar, O.","Zwick, E."],"bibdata":{"bibtype":"article","type":"article","title":"Business in the United States: Who Owns It, and How Much Tax Do They Pay?","author":[{"propositions":[],"lastnames":["Cooper"],"firstnames":["Michael"],"suffixes":[]},{"propositions":[],"lastnames":["McClelland"],"firstnames":["John"],"suffixes":[]},{"propositions":[],"lastnames":["Pearce"],"firstnames":["James"],"suffixes":[]},{"propositions":[],"lastnames":["Prisinzano"],"firstnames":["Richard"],"suffixes":[]},{"propositions":[],"lastnames":["Sullivan"],"firstnames":["Joseph"],"suffixes":[]},{"propositions":[],"lastnames":["Yagan"],"firstnames":["Danny"],"suffixes":[]},{"propositions":[],"lastnames":["Zidar"],"firstnames":["Owen"],"suffixes":[]},{"propositions":[],"lastnames":["Zwick"],"firstnames":["Eric"],"suffixes":[]}],"date":"2016","journaltitle":"Tax Policy and the Economy","volume":"30","number":"1","pages":"91–128","publisher":"University of Chicago Press","issn":"08928649","doi":"10.1086/685594","url":"https://doi.org/10.1086/685594","abstract":"“Pass-through” businesses like partnerships and S-corporations now generate over half of U.S. business income and account for much of the post-1980 rise in the top- 1% income share. We use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. We present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) Partnership ownership is opaque: 20% of the income goes to unclassifiable partners, and 15% of the income is earned in circularly owned partnerships. (3) The average federal income tax rate on U.S. pass- through business income is 19%|much lower than the average rate on traditional corporations. If pass-through activity had remained at 1980's low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28% rather than 24%, and tax revenue would have been approximately 100 billion higher.","keywords":"Wealth Taxation","file":"C\\:\\\\Users\\\\lukis\\\\AppData\\\\Roaming\\\\Zotero\\\\Zotero\\\\Profiles\\\\h20ej2eu.default\\\\zotero\\\\storage\\\\4NUIVKVG\\\\Cooper et al_2016_Business in the United States.pdf","bibtex":"@article{cooperBusinessUnitedStates2016,\n title = {Business in the {{United States}}: {{Who Owns It}}, and {{How Much Tax Do They Pay}}?},\n author = {Cooper, Michael and McClelland, John and Pearce, James and Prisinzano, Richard and Sullivan, Joseph and Yagan, Danny and Zidar, Owen and Zwick, Eric},\n date = {2016},\n journaltitle = {Tax Policy and the Economy},\n volume = {30},\n number = {1},\n pages = {91--128},\n publisher = {{University of Chicago Press}},\n issn = {08928649},\n doi = {10.1086/685594},\n url = {https://doi.org/10.1086/685594},\n abstract = {“Pass-through” businesses like partnerships and S-corporations now generate over half of U.S. business income and account for much of the post-1980 rise in the top- 1\\% income share. We use administrative tax data from 2011 to identify pass-through business owners and estimate how much tax they pay. We present three findings. (1) Relative to traditional business income, pass-through business income is substantially more concentrated among high-earners. (2) Partnership ownership is opaque: 20\\% of the income goes to unclassifiable partners, and 15\\% of the income is earned in circularly owned partnerships. (3) The average federal income tax rate on U.S. pass- through business income is 19\\%|much lower than the average rate on traditional corporations. If pass-through activity had remained at 1980's low level, strong but straightforward assumptions imply that the 2011 average U.S. tax rate on total U.S. business income would have been 28\\% rather than 24\\%, and tax revenue would have been approximately 100 billion higher.},\n keywords = {Wealth Taxation},\n file = {C\\:\\\\Users\\\\lukis\\\\AppData\\\\Roaming\\\\Zotero\\\\Zotero\\\\Profiles\\\\h20ej2eu.default\\\\zotero\\\\storage\\\\4NUIVKVG\\\\Cooper et al_2016_Business in the United States.pdf}\n}\n\n","author_short":["Cooper, M.","McClelland, J.","Pearce, J.","Prisinzano, R.","Sullivan, J.","Yagan, D.","Zidar, O.","Zwick, E."],"bibbaseid":"cooper-mcclelland-pearce-prisinzano-sullivan-yagan-zidar-zwick-businessintheunitedstateswhoownsitandhowmuchtaxdotheypay","role":"author","urls":{"Paper":"https://doi.org/10.1086/685594"},"keyword":["Wealth Taxation"],"metadata":{"authorlinks":{}}},"bibtype":"article","biburl":"https://bibbase.org/f/2kKyHojSWRAdRYh7E/gcwp z group bbt2 (with urls).bib","dataSources":["hwwYndBZYwSYRDhst"],"keywords":["wealth taxation"],"search_terms":["business","united","states","owns","much","tax","pay","cooper","mcclelland","pearce","prisinzano","sullivan","yagan","zidar","zwick"],"title":"Business in the United States: Who Owns It, and How Much Tax Do They Pay?","year":null}