Tax policy debates often focus on entrepreneurs, those risk-takers who build businesses from scratch. In an effort to better understand how innovators who create new products, introduce technologies, and expand markets are taxed, my Tax Policy Center colleague Eric Toder has taken a new look at the effects of the current revenue code and various alternatives, including proposals by President-elect Donald Trump and House Republicans.
The effects of these changes on entrepreneurs’ effective tax burdens are very sensitive to a wide range of assumptions, including the rate of return required for venture capital investments, and the time it takes before a new firm turns a profit. But using mid-range estimates, Eric calculates that the House GOP tax blueprint would significantly reduce effective tax rates on these entrepreneurs, while Trump’s most recent plan would only modestly lower their effective tax rates.
Unlike many other researchers, Eric distinguishes entrepreneurs from other small business owners. His focus is not on owners of dry cleaners or
How to Automate Video Content Marketing in Under 1 Hour
5 Easy Video Lessons +
Bonus Free Toolkit