Candidate Biden proposed to phase out the 20% deduction on pass-through net income for taxpayers with incomes of over $400K

President Biden did not include the proposal in his budget, BUT

Finance Committee Chairman Wyden, just introduced legislation to reform section 199A in several ways:

  • Phase-out the deduction between $400K and $500K of income
  • Eliminate the wage and investment limitations
  • Expand qualifying income—eliminating the prohibition on specified services income
  • Allow computation on an aggregate basis rather than business-by-business
  • Limit the deduction to individual business owners, barring estates and trusts from claiming it
  • Preclude publicly traded partnership income from qualifying

Prospects: Unclear

  • If the proposal helps tax distribution and tables (i.e., showing a shift in the tax burden to high-income individuals), then it will receive serious consideration

Policy and Taxation Group is your voice in Washington on economic freedom. We advocate for policies that allow American families to fully enjoy the economic liberties and benefits of a robust free market unique to our nation. For over 25 years, we have been the loudest voice in the nation’s capital on eliminating the death tax. This ill-conceived tax has a destructive impact on families, family businesses, job creation, and the national economy.

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