Warren Releases New Data from Joint Committee on Taxation Revealing That “Pass Through Deduction” is a Giveaway to Millionaires
JCT Report on 199A (PDF) | JCT Response on Millionaires Claiming 199A (PDF)
Washington, D.C. — U.S. Senator Elizabeth Warren (D-Mass.), a member of the Senate Finance Committee, released new data from the Joint Committee on Taxation (JCT), a nonpartisan Congressional committee dedicated to analyzing tax legislation, revealing that the majority of the benefit from the 199A tax deduction goes to millionaires.
The 199A tax deduction was created by the 2017 Tax Cuts and Jobs Act, with Congressional Republicans claiming it would support small business owners by allowing them to deduct up to 20 percent of their business’s qualified income from their personal income taxes.
JCT’s responses provided a breakdown, by income level, of who claims the 199A deduction, in addition to other key information about who the deduction benefits. Key findings include:
- More than 50% of the benefit of the 199A deduction goes to millionaires.
- The top 10% of taxpayers claimed 87% of the benefit of 199A, while the bottom 20% claimed no benefit whatsoever.
- 84% of the businesses through which individuals claimed the 199A deduction had no employees.
- More than two-thirds of the 199A deduction goes to individuals above the deduction’s phase-out thresholds, demonstrating that the law’s guardrails to prevent wealthy individuals from taking the benefit are ineffective.
- The proportion of 199A benefits claimed by millionaires increased over time from 2018 to 2022.
The House version of Trump’s “big, beautiful bill,” now under consideration by the Senate, includes an expansion of the 199A deduction from a 20 percent deduction to a 23 percent deduction.
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