A decade ago, Treasury published a paper on effective tax rates that was worth a hard look. As our write-up showed, the headlines generated by the paper were not justified by its actual findings.

We’re republishing that response today because the original Treasury paper is back in the news – it’s cited in a recent NYU-Hamilton paper on pass-through businesses and two of its authors also co-authored the “Everywhere Millionaire,” a book which – as we explained the other day – is generating similarly misguided news coverage today.

Here’s what we wrote in 2015.

New Treasury Effective Rate …

(Read More)

A new Tax Notes piece from University of Michigan law professor Reuven Avi-Yonah raises an important question about proposals to force large private businesses to become C corporations: What exactly are we trying to accomplish here? As Avi-Yonah notes:

This fiscal illusion [that corporations bear the cost of the entity-level corporate tax] allows politicians to raise taxes without justifying increases to the voters who pay them. That lack of accountability violates the principle of no taxation without representation, a foundational concept found in the Declaration of Independence and underpinning the Constitution’s origination clause.²⁰

Given the corporate tax’s complexity and the …

(Read More)

With Congress home for the elections, the opportunity for tax policy wins shifts to Treasury and the regulatory process. Here’s some good news on that front — Treasury’s Priority Guidance Plan unveiled this week highlights their plan to clarify the Section 68 haircut and its application to deductions particular to trusts and estates.

To recap, the new Section 68 contains a potential tax trap for trusts and estates that own S corporation shares and other assets. Our earlier piece included more detail on how we got here, but the bottom line is simple: if Section 68 applies to the …

(Read More)