by Scott Hodge and J. Scott Moody
August 05, 2004
Most of the people in the top one percent of earners are business owners and entrepreneurs, not just high-income individuals with trivial business income on the side, according to this report. The report looked at the business income declared by high-income people on their individual tax returns. The income reported on these schedules is business income, and the business owners who file most of these schedules also pay themselves regular salaries out of their businesses. This business income could amount to as much as 65 percent of all the income earned by the top one percent of earners ($317,000 and up in 2004). The report concludes that 55 percent of all income taxes in 2004 will be paid by business owners. High-income business owners ($200,000 or more) will pay most of that-- 37.4 percent of all income taxes.