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1 Scott A. Hodge, Wealthy Americans and Business Activity 1 (1993)

handle is hein.taxfoundation/srbdbxz0001 and id is 1 raw text is: e high-income'
siness owners,
lividuals with I
e which tax c-L
en a hotly coni
the top margin
)tion in 2001.
The Bush Trc
lividual tax rat(

taxpayers entrepreneurs an
or are they simply well-pa
rivial business activity on th
its have no effect on? This h
:ested question since the cul
al tax rates were first set in
asury says that recent cuts ii
.s help businesses too, citin
.ghly three out of four high-
Sreturns show business acti

o tracing te scon
-ntities such as S-Cc
For instance, th

ity, that is, income from sole proprietorship s,
partnerships, farms or S-Corporations. Such
businesses range in size from small sole
proprietorships to multinational S-Corporations.
On the other side of the debate, scholars
such as William G. Gale, (Tax Notes, April 26,
Small Businesses and Marginal Income Tax
Rates) argue that the top marginal tax rate cuts
did little for business owners because (1) only a
fraction of small business owners earn enough
to pay the top tax rates, and (2) those high-
income taxpayers who are business owners
receive only one-third of their overall adjusted
gross income from business income.
Both sides of the debate define business
owner broadly to include everyone who re-
ports business income on Schedules C, E and F
of their individual income tax return, but even
still) it is difficult to reconcile the two differing
interpretations of the data. Publicly available IRS
data are not detailed enough to reveal how
business owners and/or high-income taxpayers
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