Before the Independence Day festivities kick off, we wanted to wrap up the week by sharing three news-worthy items on the tax front important to the Main Street community.

SCOTUS on Taxes

First, the Supreme Court will take up a case challenging Congress’ authority to levying income taxes before the income is realized. At the heart of Moore v. United States is the plaintiff’s claim that the federal government exceeded its constitutional authority by taxing earnings before they were repatriated back to the United States. Under Section 965, Congress deemed the earnings to have been repatriated and then imposed a tax on …

(Read More)

Today’s House Budget Committee hearing on “Incentivizing Economic Excellence Through Tax Policy” is a good chance for members to learn about the importance of the Section 199A deduction for individually and family-owned businesses.

This deduction was enacted as part of the Tax Cuts and Jobs Act and serves two primary purposes – 1) to encourage job creation and economic growth by reducing the tax burden on pass-through businesses and 2) to ensure tax parity between pass-throughs and C corporations with their lower, 21-percent rate.

Did it work?  A new study by Robert Carroll at EY suggests that a rough parity …

(Read More)

The Ways and Means Committee began marking-up its long-discussed economic package earlier this morning. The package includes a number of provisions important to the pass-through community, including restoring R&E deductions and offering relief from the tighter interest expense caps.  Here’s a quick review of the package and what we expect.

Details

The Ways and Means Committee is currently marking up a three tax bills under the banner of the “American Families and Jobs Act.” The goal is for House Republicans to report them out of committee, combine them with work products from other committees, and then bring that broader package to …

(Read More)

The BIG news over Memorial Day was the debt limit deal reached by President Joe Biden and Speaker Kevin McCarthy. While the package is an obvious compromise, the result is a big positive signal for the long-term budget picture that should not be overlooked. It’s also a signal that, with tensions high and a hostile press, the government can still operate as it is supposed to.

The deal centers on a suspension of the debt ceiling through calendar year 2024. We did a deep dive last week on what a default would look like, but the takeaway was that those …

(Read More)