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The House passed a major tax legislation last year that combined significant tax reductions with substantial cuts to social safety net programs including food stamps and Medicaid. House leadership defended the measure by characterizing its benefits as supporting small business owners rather than wealthy individuals, framing them as job creators essential to American communities.
However, analysis suggests this narrative masks the true beneficiaries of the tax policy. The legislation includes provisions favoring “pass-through” businesses, which represent approximately 95 percent of American businesses and employ roughly half the workforce. These entities allow owners to avoid corporate tax rates and distribute profits at lower individual rates, generating significant savings. Research indicates that over half of pass-through income flows to the wealthiest one percent of earners, with approximately one-third of available deductions reaching taxpayers earning at least one million dollars annually.
Beyond billionaires, the policy landscape increasingly serves millions of wealthy individuals operating through these business structures. Economists estimate that for every billionaire on major wealth lists, there are thousands of millionaires organized as pass-through entities, collectively controlling tens of trillions in net worth. These Main Street millionaires—dentists, doctors, real estate developers, and business owners—have organized considerable political influence while maintaining lower public visibility than their billionaire counterparts, potentially exerting substantial power over policy decisions that disproportionately benefit their financial interests.
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Originally reported by Theguardian →
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