Small Businesses and Marginal Income Tax Rates

Research Report

Small Businesses and Marginal Income Tax Rates

April 26, 2004

Abstract

A common claim in recent tax policy debates is that raising or cutting the highest income tax rates would disproportionately affect small business. But few small business owners face the highest marginal income tax rates. Business income is not the dominant form of income in any positive tax bracket and although many returns in the top two brackets have at least some business income, few returns have most of their income from small businesses.

To reuse content from Urban Institute, visit copyright.com, search for the publications, choose from a list of licenses, and complete the transaction.