Pass-through Businesses: Data and Policy

Key Findings

The majority of companies in the United States are pass-through businesses. These businesses are not subject to the corporate income tax; instead, their income is reported on their owners’ tax returns and subject to the individual income tax.
Over the past thirty years, the pass-through business sector has expanded significantly. Pass-through businesses now earn more net income than traditional C corporations and employ the majority of the private-sector workforce…