Uncategorized - The S Corporation Association

Defense of the “Framework’s” Pass Through Tax Rate

The class warfare debate over the tax reform “Framework” has shifted its focus to the pass through business provisions. John Harwood has a typically one-sided piece on the CNBC website, which includes this paragraph:

“There is no strong policy justification for the special pass-through rate in the GOP’s plan,” said Kyle Pomerleau, an analyst at the conservative Tax Foundation. Since pass-through earnings represent around one-third of all income for the top one percent of taxpayers, Pomerleau added, the provision tilts the plan’s benefits toward the wealthy while favoring one kind of business over others.

Kyle is wrong of course. …

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admin2021-08-16T14:02:24+00:00October 10, 2017|

Treasury Pulls Harmful 2704 Rules

It’s official – the Treasury Department today released a new report announcing they will withdraw the family business valuation rules that had threatened the family business community for more than a year! Today’s announcement is a big win that will be celebrated by family businesses nationwide.

The report released today was in response to an earlier Executive Order instructing Treasury to identify and address regulations issued by the Department in 2016 that were harmful and/or exceeded Treasury’s authority. In other words, the 2704 rules. You can read the whole report here. The portion addressing the valuation rules reads like …

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admin2019-01-31T22:48:47+00:00October 4, 2017|

Framework Hits Key Notes

The Big Six released their “framework” today and it’s pretty good. You can read all eight pages here, but key provisions for Main Street businesses include:

A new, lower pass through tax rate of 25 percent;
Full repeal of the estate tax; and
Full repeal of the Alternative Minimum Tax.

Those three provisions represent long-time priorities of the Association and we applaud the Big Six for including them. As S-Corp President Brian Reardon commented:

“Today’s release is good news for Main Street businesses and the families that work for them. The Framework announced this morning would help Main Street …

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admin2019-01-31T22:48:48+00:00September 27, 2017|

Pass Through Tax Rates and the 70/30 Rule

Axios reported over the weekend that the tax plan to be rolled out by the “Big Six” Wednesday will call for a 35 percent top rate for individuals, 25 percent for pass through businesses, and 20 percent for corporations.

If true (that’s a big “if” these days with all the misinformation flying around), it’s great news. It would mean both Congress and the Administration have committed to treating Main Street businesses fairly in tax reform. That said, the devil is in the details here. As S-Corp readers know, the challenge in establishing a separate rate for pass through businesses is …

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admin2021-08-16T14:02:29+00:00September 25, 2017|

Tax Reform Plan Forthcoming

After months of meetings, the so-called Big Six are preparing to release some sort of summary of their work the weekend of the 23^rd. The Ways & Means Republicans have a retreat that weekend, and Chairman Brady intends to use the time to sell the plan. The idea is to get the Committee R’s comfortable, and then move on to the broader membership and the public.

What’s in the plan? Recent conflicting accounts over rates suggests it’s still a moving target, but there are a few areas that seem firm.

For starters, we expect it will include a combination of specifics, options, …

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admin2019-01-31T22:48:48+00:00September 15, 2017|