Washington Wire
Old Study, Same Bad Conclusions
A decade ago, Treasury published a paper on effective tax rates that was worth a hard look. As our write-up showed, the headlines generated by the paper were not justified by its actual findings.
We’re republishing that response today because the original Treasury paper is back in the news – it’s cited in a recent NYU-Hamilton paper on pass-through businesses and two of its authors also co-authored the “Everywhere Millionaire,” a book which – …
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You’re Going the Wrong Way!
A new Tax Notes piece from University of Michigan law professor Reuven Avi-Yonah raises an important question about proposals to force large private businesses to become C corporations: What exactly are we trying to accomplish here? As Avi-Yonah notes:
This fiscal illusion [that corporations bear the cost of the entity-level corporate tax] allows politicians to raise taxes without justifying increases to the voters who pay them. That lack of accountability violates the principle of no …
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SCOTUS Punts on CTA Challenge
The Supreme Court today declined to hear two challenges to the Corporate Transparency Act, including NSBA v. Bessent, leaving in place an Eleventh Circuit ruling that upheld the law last year. The Court also denied review in Texas Top Cop Shop v. Blanche. S-Corp had backed both challenges, and earlier this year helped lead a broad Main Street coalition urging SCOTUS to take them up.
Today’s news is unfortunate, but the fight over …
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Latest on Section 68
With Congress home for the elections, the opportunity for tax policy wins shifts to Treasury and the regulatory process. Here’s some good news on that front — Treasury’s Priority Guidance Plan unveiled this week highlights their plan to clarify the Section 68 haircut and its application to deductions particular to trusts and estates.
To recap, the new Section 68 contains a potential tax trap for trusts and estates that own S corporation shares and other …
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CRS Exposes the Parity Gap
A new report from the Congressional Research Service (CRS) puts fresh numbers behind a point we’ve made for a decade: Section 199A is essential to keeping pass-through businesses competitive with their C corporation counterparts.
The report examines the effects of increasing the Section 199A deduction from its current 20 percent to 25 percent, which was floated as part of last year’s tax bill debate. CRS modeled that proposal to see how it would …
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S-Corp in the Examiner
S-Corp President Brian Reardon is out with an op-ed in the Washington Examiner taking a closer look at The Everywhere Millionaire, the new book highlighting America’s surprisingly large population of successful, self-made business owners. As he writes:
At its core, the book includes dozens of supportive profiles of people who built up great family businesses, often in the most unlikely of places and industries. Who knew you could start a billion-dollar business with a hot dog cart in …
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Americans Trust Main Street
A new Gallup survey has prompted another round of debate over capitalism versus socialism. The headline number is striking: 43 percent of Americans now view socialism positively, the highest share recorded.
Yet socialism still trails capitalism, which 55 percent view positively, and free enterprise, at 77 percent. Small business leads the field by a wide margin, earning a positive rating from 95 percent of Americans. Big business is the outlier at 35 percent.
Chamber of Commerce …
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Pass-Throughs & Inequality
Apollo’s “Daily Spark” had a nice blurb last week featuring the “Everywhere Millionaire.” Here’s what they said:
The income that lifted America’s top 1% did not come mainly from tech or Wall Street, according to The Everywhere Millionaire. More than half of the rise in the top 1% income share since 1985, 5.8 of 10.5 percentage points, flowed through pass-through businesses, see chart below.
The authors, Owen Zidar and Eric Zwick, counted roughly 3 million wealthy …
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