199A TCJA - The S Corporation Association

Two Maps, One Reality

Earlier we highlighted research showing how well the United States is doing compared to Canada. Starting in a similar place forty years ago, today’s American worker earns more and benefits from significantly higher levels of business investment. It’s a gap that is large and growing.

Today we’ve got another geography-based point to make, courtesy of the Wall Street Journal and economists Eric Zwick and Owen Zidar (both of whom spent their formative years getting called last during roll call). Their book “The Everywhere Millionaire” reviewed America’s growing ranks of job creators and discovered the American Dream is alive and …

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admin2026-10-14T20:43:19+00:00October 14, 2026|

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 affect marginal effective tax rates on new business investment. Their chart shows the results:

As noted, Marginal …

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admin2026-09-29T16:39:30+00:00September 29, 2026|

Tax Relief Takes Center Stage

Republicans in Dallas had plenty to say about last year’s Working Families Tax Cuts bill. Ways and Means Chairman Jason Smith made the case directly, recounting the marching orders he gave his colleagues when he took the committee gavel:

When I was selected by my colleagues to chair the House Ways and Means Committee, I told them that we were done writing tax cuts for millionaires and billionaires. Our priority was going to the working class, men and women we represent in Washington….

Today, thanks to the working families tax cuts, if you are a family of four and make less than …

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admin2026-09-11T19:07:14+00:00September 11, 2026|

199A Trigger Warnings

Tax writers need to put a trigger warning on future 199A discussions, particularly for DC tax experts. It appears they are highly sensitive to the topic.

For example, in response to Ways and Means Chairman Jason Smith’s recent support for increasing the 199A deduction to 25 percent, AEI’s Kyle Pomerleau posted some thoughts that, on the surface, appear to make sense:

Pass-through businesses are already tax advantaged. Although C corporations face a 21 percent corporate tax rate, their profits are also subject to the individual income tax when distributed to shareholders. After considering various tax provisions that reduce the …

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admin2026-07-31T12:45:50+00:00July 31, 2026|

A Tale of Two Studies

The Brookings Institution is out with two new tax studies, one great, one not so much.

The great one is a paper by Bill Gale, Adam Looney and Elena Patel calling for a border-adjusted cash-flow tax. This is something S-Corp supported when it was debated in Congress back in 2016, and it’s still a good idea. Why? It would balance out tax rates between industries and financing methods, it would eliminate the need for all those ridiculous international rules, and it would fit nicely into a corporate integration regime that would level the playing field for close-held businesses …

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admin2026-06-17T20:39:03+00:00June 17, 2026|