Home/199A TCJA

Section 199A Reality Check

Chuck Marr, who heads up tax policy at the Center on Budget and Policy Priorities, took to Twitter recently to slam the Section 199A deduction. It’s a perfect example of the empty rhetoric deployed by critics of the provision:

There’s a lot to unpack here so we’ll start from the top. First, Marr is correct that pass-through businesses do not pay the corporate tax – they pay tax at individual rates.

These days, that’s a critical distinction, as the 37-percent top individual rate is well above the 21-percent corporate rate.  So are

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2023-08-17T17:52:24+00:00August 17, 2023|

Support for 199A Reaches New Heights

The effort to make permanent the Section 199A Main Street business deduction just hit a significant milestone.

In just two weeks the Main Street Tax Certainty Act (H.R. 4721), introduced by Congressman Lloyd Smucker, has garnered the support of more than 100 House cosponsors. Among those backing the legislation are Democratic Representatives Henry Cuellar (TX) and Josh Gottheimer (NJ), and all 25 Republican members of the Ways & Means Committee.

Section 199A was enacted in 2017 to encourage job creation and new investment by private businesses.  It also helps private companies compete with large, publicly-traded corporations. Without the deduction, pass-throughs would

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2023-08-01T14:36:44+00:00August 1, 2023|

Main Street Tax Certainty Act

Good news for Main Street! Long time S-Corp champion Senator Steve Daines from Montana plans to introduce his “Main Street Tax Certainty Act” later today.  Cosponsored by more than a dozen of his colleagues, the bill would prevent rate hikes on America’s individually and family-owned businesses by making permanent the Section 199A 20-percent deduction.  This deduction was created by the Tax Cuts and Jobs Act but is scheduled to sunset at the end of 2025.

The introduction of this legislation was widely anticipated in the business community, with more than 140 trade associations representing millions of Main Street businesses, including NFIB,

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2023-05-25T17:56:24+00:00May 18, 2023|

Grading the TCJA, Two Years Later

The American Enterprise Institute has a new“Trump Tax Reform Blog” series on its website.  Over the next month, tax policy folks from both sides will weigh in on the reform and whether it’s working.  You can read the current posts here. Our invitation to comment must have got lost in the mail, but no worries, it’s a brave new world and we can comment anyway.  Here’s our report:

Has the TCJA helped American workers and businesses with additional economic growth?  Such questions are impossible to answer with absolute certainty, since we will never know what the economy would have done

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2021-08-16T14:00:03+00:00September 27, 2019|

Treasury on 199A Guardrails

Remember this JCT chart from earlier this year?  It garnered lots of attention and called into question how the 199A pass-through deduction was structured.  If only 9 percent of all pass-through income was disqualified from getting the deduction, what was the point of having all those complicated rules?

We wondered about the estimate at the time, as it didn’t comport with our member’s experience.  In our S-CORP survey this year, only half of our members expected to get the full deduction, while rest expected just a partial deduction or no deduction at all.

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2021-08-16T14:01:00+00:00August 27, 2019|