ey - The S Corporation Association

Section 199A Deduction Needed to Provide Pass-Throughs Tax Parity with C Corporations

A new presentation on the Section 199A deduction from the Joint Committee on Taxation has gotten people’s attention, particularly this slide:

The slide prompted Senator Ron Wyden, the Ranking Member on the Senate Finance Committee, to observe, “These are not the struggling small business owners we were told this provision would benefit.”

The Ranking Member’s response is misdirected, however. The 199A deduction was not an effort to reduce taxes on small businesses, but rather an attempt to maintain tax parity for pass-through businesses of all sizes. Without 199A, Main Street …

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S Corporations Hit by Tax Hikes

Our friends at McGladrey LLP have a new survey out of mid-market firms showing just how hard those companies have been hit by the tax rate hikes championed by President Obama and his allies in Congress.

Recall that in the run-up to the Fiscal Cliff, Ernst & Young released a paper on our behalf that predicted the higher rates set to begin in 2013 would hurt investment and job creation by significantly hiking taxes on mid-sized employers. Over the long-term, E&Y estimated the U.S. would lose 710,000 jobs.

Now McGladrey’s survey shows just how those job losses and lower investment …

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