7 professions that are going to win big from tax reform
Jeff J Mitchell / Getty ImagesThe measure has been criticized as a boon to the 1%.• House and Senate Republicans have worked out a final tax plan, which includes a 20% deduction for pass-through businesses.
• Business Insider's Pedro Nicolaci da Costa wrote this will "disproportionately benefit the wealthy" by allowing rich business owners to avoid higher individual tax rates.
• Small Business Labs estimates the plan's pass-through policy will only benefit top earners.
The finalized Republican tax plan throws a 20% tax deduction the way of pass-through businesses.
Pass-through businesses - including LLCs and S-corporations - don't pay corporate taxes. Instead, income "passes through" to the owner, who then pays taxes on the earnings.
The House initially proposed a 25% deduction, while the Senate's initial plan called for a 23% deduction.
The measure has been criticized as a huge boost to the 1%. According to Small Business Labs, this provision stands to benefit only the wealthiest of pass-through business owners, and will not likely apply to highly-paid professionals who run "service firms," including doctors and lawyers.
Business Insider's Elena Holodny reported the wealthiest American households "stand to benefit handsomely from the plan," with a $10 million household income receiving an annual tax cut of over $200,000.
Here's a look at some occupations that are likely to benefit most from the plan:View As: One Page Slides
Hedge fund owners
As a presidential candidate, Donald Trump blasted "the hedge-fund guys," who he claimed were "getting away with murder," Business Insider reported.
"They're paying nothing, and it's ridiculous. I want to save the middle class," he said, in an interview with CBS.
But Small Business Labs estimates the owners of "very profitable" hedge funds will see a major tax cut.
Private equity firm owners
Small Business Labs estimates the owners of "very profitable" private equity firms will see a major tax deduction.
Real estate development fund owners
Small Business Labs reporters the owners of "very profitable" real estate development firms will also benefit from the plan.
Small business owners who are in the 35% or 39.6% tax bracket now
Small Business Labs predicted small business owners in the 35% or 39.6% tax bracket — meaning those who make over $416,700 a year — will see "a tax reduction on their business income."
Small business owners earn an average annual salary of $68,897, according to PayScale.
Some self-employed doctors
According to Small Business Labs, most doctors will not be able to find a way around the plan's "guard rails." But they predicted some high-earning doctors may slip through and benefit from the policy change.
Some self-employed lawyers
According to Small Business Labs, most lawyers will not be able to find a way around the plan's "guard rails." But they predicted some high-earning lawyers may slip through and benefit from the policy change.
Some freelancers and contract workers
According to Small Business Labs, most consultants — freelancers or other contract workers who are not paid as employees — will not be able to find a way around the plan's "guard rails." But they predicted some high-earning consultants may slip through and benefit from the policy change.
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