Tax Breaks for Wealthy Targeted by Democrats in Budget Conference

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Millionaires who avoid payroll taxes by claiming income as business profits are among those in Democrats' sights as congressional budget negotiators seek a deal by next month.
Limiting the ability of some business owners to use the S corporation structure would save $12 billion over the next 10 years, according to a list of tax breaks obtained by Bloomberg News that Democrats say should be among those considered for elimination.
That provision allowed Newt Gingrich and John Edwards to avoid payroll levies, according to tax returns the two filed during their 2012 and 2004 campaigns for the White House. Both men paid themselves relatively small salaries subject to payroll taxes, then took the rest of their compensation in the form of dividends from their firms, allowing them to avoid payroll taxes on that portion of their income.

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