Donald Trump doesn’t just love billionaires, he loves multimillionaires too
{
"title": "Beyond the 'Small Business' Façade: Unpacking US Tax Policy's Richest Beneficiaries",
"article": "When House Speaker Mike Johnson heralded Donald Trump’s One Big Beautiful Bill Act (OBBBA) last year, he presented its $5tn-plus tax cuts as a boon for the “small business owners” who “provide the jobs in every community in America.” This narrative, a familiar ode to the modest Main Street job creator, belies a far more concentrated beneficiary list, one that systemically deprives government revenue and overwhelmingly serves the interests of the wealthy.\n\nThe OBBBA, which paired its substantial tax cuts with over $1tn in reductions from food stamps and Medicaid, cemented a crucial provision benefiting “pass-through” businesses. These entities, comprising about 95% of US businesses, employ half of all workers and generate more than half the nation’s business income. Critically, they are exempt from corporate income tax; their profits flow directly to owners, who then pay lower individual tax rates, a mechanism saving them billions.\n\nThe political muscle behind this structure is formidable. Senator Ron Johnson, for instance, in 2017, threatened to withhold his vote for Trump’s Tax Cut and Jobs Act until the Senate increased the tax deduction for pass-through business income from 17% to 20%. This deduction, made permanent in last year's “big beautiful bill,” is projected to cost the budget $820bn over a 10-year period, nearly matching the cuts made to the Medicaid budget.\n\n### The Million-Dollar Distortion in the Tax Code\n\nThe economic implications of this policy are stark. According to the Urban-Brookings Tax Policy Center, a staggering 57% of the $1.3tn in pass-through income in 2022 flowed to just 890,000 individuals, representing the richest 1% of the population. Further underscoring this concentration, a study by economists at the Department of the Treasury, the Federal Reserve Bank of Minneapolis, and Dartmouth University found that 35% of the total deductions in the year following the 2017 tax cut—a cold $54bn—benefited taxpayers with incomes of at least $1m.\n\n### Rhetoric Versus Reality: The Personal Stakes of Policy Makers\n\nThe chasm between the policy’s stated purpose and its actual outcomes is striking. While Speaker Mike Johnson champions the “small business owner,” his own financial situation, including living in a $3.7m townhouse owned by millionaire Republican donor Lee Beaman, paints a different picture. Similarly, Senator Ron Johnson’s “real affinity for these owner-operated pass-throughs” becomes particularly salient when considering he owned a stake in a plastics maker, selling it in 2020 for $5m to $25m, building a fortune estimated at $40m by 2018, making him the sixth-richest senator at the time. These instances highlight a direct, personal alignment with the policies being enacted.\n\n### America’s Everywhere Millionaires\n\nThe ongoing impact of these policies fosters an environment where wealth increasingly concentrates. Economists Owen Zidar from Princeton and Eric Zwick from the University of Chicago are soon to publish a "panoramic profile" of these “everywhere millionaires”—the dentists, doctors, car dealers, insurance salesmen, and lawyers who, while not always publicly labeled as billionaires, are substantial beneficiaries of a tax system skewed in their favor. This dynamic not only deprives the government of crucial tax revenue but also stunts American capitalism, distorts regulations, and stifles genuine competition, fundamentally twisting policy to serve millionaire interests.",
"tweet": "US 'small biz' tax cuts? Think again. The 'One Big Beautiful Bill Act' funnels $54bn+ to millionaires, costing $820bn from the budget. Meanwhile, food stamps & Medicaid get slashed. It's not Main Street, it's Wall Street's street. #USTaxPolicy #WealthGap",
"excerpt": "When House Speaker Mike Johnson lauded Donald Trump’s One Big Beautiful Bill Act, presenting its multi-trillion-dollar tax cuts as a boon for 'small business owners,' he championed a narrative that starkly contrasts with the reality. Delving into the 'pass-through' business structure, this article uncovers how US tax policy, particularly provisions costing $820bn over a decade, overwhelmingly serves the richest 1%, funneling billions to millionaires while public services face significant cuts.",
"keywords": "US tax policy, pass-through businesses, OBBBA, wealth concentration, tax cuts, Mike Johnson, Ron Johnson, Medicaid cuts, small business myth, economic policy, government revenue"
}