The House tax package would hit private companies twice as hard as public C corporations.  It would impose marginal rates of 46.4 percent or more on private companies, while taxing public corporations as little as 26.5 percent.  No business structure can survive such an imbalance, so the net effect would be to encourage further economic consolidation away from Main Street and towards Wall Street.

Why should policy makers care?  Because private companies are where the jobs are.

A new study from EY demonstrates that private companies supply the vast majority of jobs nationally – 77 percent of them.  Public companies supply …

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S Corporation Association advisor and Board member Tom Nichols of Meissner Tierney Fisher and Nichols has published a solid defense of 199A in TaxNotes this week.

As we’ve noted previously, the House tax package would knee-cap private companies with rates nearly twice those paid by public C corporations – 46.4 percent versus 26.5 percent.  No business structure can survive such an imbalance, so the net effect would be to encourage further consolidation into the few thousand companies traded on the public exchanges.  That’s bad for millions of Main Street businesses and bad for the workers and communities that depend on …

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The House Ways and Means Committee on Monday released legislation aimed at paying for the Democrats’ $3.5 trillion spending package. Committee members are scheduled to begin marking up the package today and expect to finish on Wednesday. A summary document suggests the tax hikes would amount to some $2 trillion in new revenue, with an additional $200 billion in savings resulting from increased IRS funding.

Provisions Affecting Pass-Throughs

For private businesses, the Chairman’s mark is nothing short of a declaration of war.  There’s a reason more than 120 groups wrote the Committee in opposition to the package last week.  …

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The Section 199A deduction is under attack.  Senate Finance Chair Ron Wyden’s Small Business Tax Fairness Act would phase-out the deduction for owners making between $400,000 and $500,000, while critics of the deduction continue to voice their concerns loudly and often.

This post addresses all these concerns and makes the case for why Congress should retain the full 199A deduction:

• Under the Wyden bill, up to one million pass-through employers are at risk of seeing a tax hike, putting at risk up to 28 million jobs.
• Coupled with the other rate hikes under consideration, including the higher corporate rate, between …
  
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Having secured passage of their budget resolution last week, House Democrats are wasting no time in assembling the ensuing reconciliation package with tentatively scheduled markups starting as early as Thursday. It’s the start of an all-out sprint for Democrat lawmakers as they work to meet a host of high-profile September deadlines.

We’ll have a lot more clarity as the committees – particularly Ways and Means – make public their portions of the reconciliation package, but last week’s events at least give us a sense of the timing and roadblocks facing its adoption. Below is our commentary on those developments.

About that …

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