Christine Walizer, Author at The S Corporation Association

Hit and Run Economics

Just in time for tomorrow’s Senate Budget Hearing, a new NBER Working Paper – coauthored by Gabriel Zucman and entitled, “Tax Evasion at the Top of the Income Distribution: Theory and Evidence” – was released this week, with the headline-grabbing conclusion that rich people significantly underreport their income.

This paper is in the same vein as the other work put forward by Piketty, Saez, and Zucman (PSZ), coupling headline-grabbing conclusions with highly dubious assumptions. PSZ got rich selling the idea that the rich have gobbled up all the economic gains in recent years, but their academic reputations are in tatters. …

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admin2021-03-24T22:06:08+00:00March 24, 2021|

199A Essential to Rate Parity

Since the Tax Cuts and Jobs Act’s passage at the end of 2017, some have seized on the Section 199A deduction as a “loophole” that stacks the deck in favor of pass-through businesses.

We’ve heard – and responded to – various criticisms of the provision over the years. But the brief Twitter exchange below caught our eye:

It’s an interesting question, but is the premise correct? Is the tax bill for the independent contractor (IC) really 20 percent lower than the employee?

Keep in mind that an employee making $50,000 …

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admin2021-03-24T12:59:40+00:00March 24, 2021|

Razorbacks Roll with SALT Parity

We can’t predict victory for the University of Arkansas’s basketball team in March Madness (Seeded 3^rd in the South) but the state’s pass-through business owners are already winners, as the state officially became the ninth state to adopt our SALT Parity reforms yesterday. Governor Asa Hutchinson signed House Bill 1209 into law just last night.

The new law allows owners of pass-through businesses – including S corporations and partnerships – to elect to pay their state taxes at the entity level, rather than having the business’s income flow through to the individual owners.

By way of background, deductions on state and …

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admin2021-03-18T11:47:24+00:00March 17, 2021|

Income Inequality and S Corporations

Whether they like it or not, S corporations and other pass-through businesses are at the heart of the income inequality debate that has been raging in economic circles for the past two decades. That’s because the shift of economic activity from traditional C corporations to the pass-through sector since 1986 has skewed the income data, making it look like the wealthy gained more than they really did.

The case for growing income inequality has been under scrutiny for years now, at least in academic circles. Numerous papers have revealed the flawed data and assumptions underpinning the work of Piketty, Saez, and Zucman, among …

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admin2021-03-08T19:33:05+00:00March 8, 2021|

S-Corp Testifies on Michigan SALT Parity Legislation

S Corporation Association President Brian Reardon testified this week – via Zoom – before the Michigan House of Representatives’ Tax Policy Committee. The subject of the hearing was H.B. 4288, which would permit electing pass-through businesses to pay their state and local tax (SALT) at the entity level, thus enabling them to fully deduct these expenses on their federal returns. Click the screenshot below for a video of Brian’s testimony:

Brian kicked off his testimony with a presentation (available here) on how Michigan taxpayers would benefit from enactment of H.B. 4288. …

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admin2021-03-07T14:09:10+00:00March 4, 2021|