ICYMI: Yes, a tax break Ron Johnson pushed for in 2017 has benefited America’s wealthiest more [PolitiFact]

IN CASE YOU MISSED IT

Politifact: Yes, a tax break Ron Johnson pushed for in 2017 has benefited America’s wealthiest more
By Madeline Heim
May 7, 2022

Key Points:

• In a news release, the Democratic Party of Wisconsin honed in on an action Johnson took at the beginning of his second term: He withheld his yes vote on the 2017 Tax Cuts and Jobs Act unless the bill included a tax break for companies called “pass-throughs” — those that pass all their income on to the owners or investors. Companies structured this way (often small, family owned businesses) are not subject to corporate income tax.

• And it worked. Once that tax break was added, Johnson voted yes and the bill passed.

• Wisconsin Democrats argue it wasn’t those small, family-owned businesses that reaped the bulk of the benefits.

• “Multiple independent studies found that the tax carve out Johnson spearheaded overwhelmingly benefited the wealthiest, over small businesses,” the April 29, 2022 release said.

• [A] study from Treasury economists for the National Bureau of Economic Research… found that the top 1% of Americans by income have received nearly 60% of the tax savings created by the provision. Most of that amount went to the top 0.1%.

• Most pass-through profits flow to the wealthy owners of a small group of large companies, according to an Aug. 11, 2021 ProPublica analysis of the tax law.

• That small group of the ultra-wealthy — made up of Republicans like Dick and Liz Uihlein, whose shipping supply company Uline is headquartered in Wisconsin, … received close to $25 billion in total tax savings in 2018 as a result of the pass-through tax break benefits, according to the National Bureau of Economic Research study.

• The Joint Committee on Taxation estimated that roughly 53% of the pass-through deduction benefit, or about $21 billion, would go to a few hundred thousand Americans earning $500,000 or more a year.

• The Democratic Party of Wisconsin claimed that the pass-through tax break Johnson advocated for in 2017 “overwhelmingly benefited the wealthiest, over small businesses.”

• Multiple analyses show America’s millionaires and billionaires are receiving large chunks of those benefits.

• We rate their claim True.

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