Home/199A TCJA

CRS on Marginal Rates

As Congress puts together the big tax bill, CRS just produced another reminder of why making the Section 199A pass-through deduction permanent needs to be part of the package. This chart says it all:

The rates reflected here are important because they measure the overall tax burden imposed on new investment. As CRS notes: “The marginal effective tax rate (METR) is a forward-looking measure that estimates… the share of the rate of return on a prospective investment that is paid in taxes over the life of that investment.”

So under current law,

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2025-03-10T20:22:20+00:00March 10, 2025|

Strong Business Community Support for House Budget Resolution

The Main Street business community has come out in strong support of the House Budget Resolution scheduled to be considered this week.  The simple reality is there will be no tax bill unless Congress adopts a budget that calls for one.  As Karen Kerrigan noted in her letter to House leaders:

This must be a priority for Congress…passing the budget resolution is a vital first step toward that end. Renewing expiring small business provisions in the TCJA such as the 20% small business deduction, lower individual income tax rates, higher threshold exemptions on death taxes, and restoring incentives such as

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2025-02-24T21:54:19+00:00February 24, 2025|

The Experts are Wrong (Part V)

Several months ago, we asked Penn Wharton to help us score some ideas on tax reform.  They politely declined.  Too busy analyzing the 199A deduction, apparently. Their new paper on the deduction makes two points — the first is wrong and the second, while interesting, is not particularly helpful.

Their first point is that “Section 199A provides a 20 percent reduction in the tax rate for qualified business income relative to ordinary income tax rates.” That’s wrong. The Section 199A deduction reduces a pass-through’s Qualified Business Income, not the tax rate. The deduction makes no claims on tax rates.

This mischaracterization

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2025-01-30T17:32:11+00:00January 30, 2025|

Main Street Tax Certainty in the House (and Senate)

Earlier today Senator Steve Daines and Congressman Lloyd Smucker reintroduced their Main Street Tax Certainty Act, legislation to make permanent the Section 199A deduction. The bills mirror S. 1706 and H.R.  4706 from last Congress, meaning the campaign to protect Main Street from looming tax hikes is once again a bicameral and bipartisan effort.

The legislation introduced today builds on our prior success in a big way. Whereas the previous House bill garnered support from 91 original cosponsors – a significant feat in and of itself – Congressman Smucker’s bill was released today with the backing of 151 original cosponsors. It’s

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2025-01-23T22:47:21+00:00January 23, 2025|

Main Street Rallies Around 199A Permanence

More than 230 trade associations came out in support today of legislation to make permanent the Section 199A deduction. Appropriately named the Main Street Tax Certainty Act, the bill is set to be reintroduced tomorrow by Senator Steve Daines (R-MT) and Representative Lloyd Smucker (R-PA), two of the Main Street business community’s staunchest allies.

The deduction was enacted in 2017 to encourage job creation and new investment by private businesses.  It also helps private companies compete with public corporations. Without the deduction, pass-throughs would face rates up to 16 percentage points higher than their publicly-traded competitors. The challenge is

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2025-01-22T16:48:04+00:00January 22, 2025|