Qualified business income deduction (§199A)
Owners of pass-through businesses deduct 20% of that income before tax.
JCT line: "Deduction for qualified business income".
The deduction is proportional to pass-through income, which is heavily concentrated among a small share of owners. The wage and capital limitations further favour larger operations over small ones.
Structural reading
The most legible recent example of the core loop, because the timeline is short enough to see whole. A corporate rate cut created a gap between corporate and pass-through taxation; organised pass-through interests argued the gap was unfair; the resulting deduction is proportional to income and therefore delivers most of its value to the largest operators. The wage-and-property limitation, added to prevent the deduction from becoming a pure labour-income shelter, has the side effect of favouring capital-intensive entities over the small service businesses most often invoked in its defence. The provision was enacted in 2017 with a sunset and made permanent in 2025, which completes the loop this site is built to show: a temporary preference, an organised beneficiary class, and an expiry date that arrived and was removed.
Who gets it
The channels the benefit actually flows through, described by asset position, entity form and form of return. Never by named individuals.
Cost split by the concentration score. That score is a judgement rather than a published figure, so treat this as the scale of the split, not an audited allocation.
- Owners of large pass-through entities
Because the deduction is a fixed percentage of qualified income, its value scales linearly with the size of the ownership stake.
- Businesses structured to satisfy the wage and property tests
The limitations reward entities with substantial W-2 payroll or depreciable property, favouring capital-intensive operations over small service businesses.
- Income recharacterised from wage to distribution
The deduction creates a standing incentive to structure compensation as owner distribution rather than salary, a margin unavailable to employees.
Who pays
Wage earners and taxpayers generally. Employees performing identical work as W-2 staff receive no equivalent deduction.
Sector aggregate.
This transfer follows a general pattern, asymmetric organisation, sustained expert attention, and scheduled expiry dates.
How rent-seeking works →Legislative history and accountability
Enacting statutes, major amendments, recorded votes with party breakdown, and live reform proposals.
Enabling legislation
- Tax Cuts and Jobs Act of 2017P.L. 115-97Dec 22, 2017
Created §199A to narrow the gap between the new 21% corporate rate and the top individual rate applied to pass-through income. Enacted through budget reconciliation with no votes from the minority party in either chamber.
houseDec 20, 2017· Agreed to, 224-201Who voted which way: full roll callDemocratic0 yea189 nayRepublican224 yea12 naysenateDec 20, 2017· Passed, 51-48Who voted which way: full roll callDemocratic0 yea46 nayRepublican51 yea0 nayIndependent / other0 yea2 nay
Major amendment
- One Big Beautiful Bill ActP.L. 119-21Jul 4, 2025
Removed the sunset from §199A(i), making the deduction permanent at the unchanged 20% rate, and widened the phase-in range for specified service businesses from 2026. Enacted through budget reconciliation.
Party-line (Republican)Enacted through budget reconciliation, the procedure that allows passage without minority-party votes. No separate roll call on this provision is recorded here.
Reform proposal
- Proposals to limit or phase out the deduction above a thresholdlive
Proposals in recent Congresses would cap the deduction or phase it out at higher income levels. With the sunset now removed, repeal or limitation requires affirmative legislation rather than mere inaction.
Lobbying around this provision
This is not campaign money, and it is not attributable to the votes above. Lobbying disclosures record what organisations spent engaging policymakers across an entire issue area over a quarter. They are not broken out by party, by member, or by bill, and no part of this figure can be traced to any vote on this page. It is shown as an indicator of how organised the interest around this provision is, nothing more.
Demonstrating an actual relationship between money and votes would require campaign contribution records matched to each member of the roll call. That is a different dataset and is not yet built here.
Senate LDA filings, search disclosures by filer and issueSources and data freshness
Published within the last year. Figures marked unverified are seed estimates that have not been reconciled line-by-line against the primary source document. See the methodology for how each score is constructed.