Part 6 of a series about Taxing Businesses
In the 1980s the effective top rate on pass-throughs (unearned) was dropped to match the corporate rate on profits, making pass-through businesses more desirable than in the past since with pass-throughs owners were not double taxed. As a consequence, these tax changes created an incentive to change the business structure from C corporation to pass-throughs. The double taxation of corporate profits had provided an incentive for corporations to retain earrings (to save) but a pass-through’s profit is tax indifferent between saving and consumption (there is no incentive to either save it or spend it).
C corporation’s share of net business income dropped from 1980 to 2012, 68% to 37%. The effect of fewer C corporations and more pass-through businesses was less savings since retained earnings by corporations was half of private savings (pdf). So, tax-induced decrease in number of corporations had a
A Look Back At Warren Buffett’s Best and Worst Oil & Gas Investments
Warren Buffett is perhaps best known for his large investments in some of the world's most recognizable brands, companies like Coca-Cola, American Express and Apple. Q1 2020 hedge fund letters, conferences and more Companies that fit into this bracket seem to fall squarely within his circle of competence. They sell a product that's easy to Read More
substantial effect on the level of private savings in the US.
Federal Reserve Economic Data is the source for net savings.
Article by Visualizing Economics