Contact your Representative and Senators!

The tax reform bill before Congress offers pass-through businesses a 23 percent deduction applied against some of their active business income.  The deduction is the pass-through alternative to the 20 percent corporate rate, and it results in an effective pass-through tax rate of just under 30 percent.

Many family businesses will NOT benefit from the deduction, however, because the Senate bill precludes trusts and estates from using the deduction.  This is not a small issue – every family business subject to the estate tax has these trusts.  They are designed to help the business survive from one generation to the next and have nothing to do with income taxes.  Most of these trusts have to pay tax at the highest income tax rates.

This exclusion will hurt a majority of multi-generational family-owned businesses, including wholesalers, distributors, contractors, and manufacturers.  These large pass through businesses employ nearly 20 million workers and are the cornerstone of local economies nationwide.

Smaller businesses will be affected too, because many states, such as MA, impose a state-level estate tax with thresholds significantly lower than the thresholds in the Federal estate tax.  Federal tax law must continue to recognize this fact.

What should you do?

  • First, call your tax advisers to assess how the Framework will affect your business.  Lower rates, estate tax repeal, and repeal of the Alternative Minimum Tax are important reforms for family businesses; and
  • Second, fill out the information below to send a note to your Senators and Representative to educate them on how the Senate tax reform bill will hurt your ability to invest and create jobs.

Congress will lock down the details of these bills this week, so time is short!  You need to act now.

Dear Senator/Representative:

As an S corporation owner and employer in your state, I strongly encourage you to support tax reform that levels the playing field for Main Street businesses.

The Senate-passed tax reform bill offers pass-through businesses a 23 percent deduction applied against some of their active business income, but many family businesses will NOT benefit from the deduction, however, because the Senate bill excludes trusts and estates from using the deduction.

These trusts are used to help family businesses survive from one generation to the next, and it is simply unfair for the Tax Code to force family businesses to use these trusts to help ensure the business survives the estate tax, and then punish them for doing so with higher tax rates.

Senator James Inhofe (R-OK) is circulating a letter supporting making family business interests held in trust eligible for the new pass-through deduction.   As a constituent and family business owner, I respectfully request that you contact Senator Inhofe’s office and add your name to the letter.  Time is short and the tax bill is moving quickly, so please reach out today.

Thank you for your attention to this matter.

Sincerely,

Please fill out the form below to submit this message to your Representative.

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