Tax Policy - The S Corporation Association

Wealth Taxes Pose Existential Threat to Private Businesses

The Peterson Institute held a “Combating Inequality” event last week that included a vigorous debate over wealth taxes. The heavyweight match between Emmanuel Saez – the leading advocate for wealth taxes these days – and Larry Summers in particular is worth watching.

One aspect missing from the debate, however, was how wealth taxes would handcuff successful private businesses. Summer briefly touches on the challenge his family’s hardware store would have paying the tax, but there is so much more to it. Wealth taxes:

Are far larger than their headline numbers suggest;
Paid on top of all existing taxes;
Hit hardest …

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admin2019-10-22T14:03:18+00:00October 22, 2019|

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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admin2021-08-16T14:00:03+00:00September 27, 2019|

Perception v. Reality on Tax Rates

Here’s a conundrum. A recent poll revealed that 76 percent of Americans support increasing taxes on the “wealthy,” while sixty-one percent support the wealth tax proposed by Senator Elizabeth Warren, which is like an income tax, only at ridiculously high rates.

But polls also show Americans consistently oppose high tax rates, even on the wealthy. This summer, for example, the Winston Group asked registered voters: “For each of the following, what is the maximum rate at which you think they should be taxed?” …[T]he average responses were all consistently low, ranging from a high of 31 percent for the …

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admin2019-09-09T15:44:51+00:00September 10, 2019|

Failure of High Marginal Rates

Earlier this year, the Congressional Budget Office produced a report reviewing tax rates on labor income since 1962 that includes some important lessons for tax policy folks.

The first lesson is that nothing replaces a really cool chart. Take this heat map, for example. What a great way to convey a lot of information all at once. If you’re a taxpayer, the simple way to view it is lighter colors good, darker colors baaad.

Our second lesson is how much more progressive the tax code has become since the 1960s. Back then, nearly …

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admin2019-08-28T16:43:54+00:00September 3, 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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admin2021-08-16T14:01:00+00:00August 27, 2019|