Some Pass-Through Businesses are Significant Employers

In the United States, most businesses are not C corporations. 95 percent of businesses are what are called pass-through businesses. These businesses are called pass-throughs because their income is passed directly to their owners, who then need to pay individual income taxes on it. Contrast this with C corporations that need to pay the corporate income tax on its income before it passes its earnings to its owners. Combined, pass-through businesses employ 55 percent of all private-sector workers and pay nearly 40 percent of all private-sector payroll.

Publisher: Tax Foundation | Author: Kyle Pomerleau

TAGS
small business and taxes
DATE PUBLISHED
2015-02-10 (Modified: 2015-02-10)

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