Trump Makes 20% Pass-Through Tax Break Permanent, Costing $820 Billion Over 10 Years
Updated
Updated · The Guardian · Aug 15
Trump Makes 20% Pass-Through Tax Break Permanent, Costing $820 Billion Over 10 Years
1 articles · Updated · The Guardian · Aug 15
Summary
$820 billion in projected 10-year costs stems from making the 20% pass-through deduction permanent in Trump’s One Big Beautiful Bill Act, locking in a tax break critics say chiefly benefits wealthy owners.
57% of $1.3 trillion in pass-through income in 2022 went to 890,000 people in the top 1%, while one study found 35% of the deduction’s first-year value—$54 billion—went to taxpayers earning at least $1 million.
That preference cuts the top tax rate on pass-through profits to 29.6%, below the 37% top marginal rate on wages, reinforcing a long-running Republican push that was expanded from 17% to 20% in the 2017 tax law.
The report argues the beneficiaries are not mainly small firms but affluent doctors, car dealers, real-estate brokers and other 'Main Street millionaires' whose lobbying and political donations help preserve both tax breaks and market protections.