Last week’s circuit court decision on the meaning of “limited partner” has broad implications for S corporations in the coming tax battles. As noted in the court’s ruling:

This case turns on the meaning of “limited partner” in 26 U.S.C. § 1402(a)(13). The Tax Court interpreted “limited partner” to refer only to passive investors in a limited partnership. It therefore upheld the IRS’s upward adjustment of Sirius Solutions’s net earnings from self-employment. We disagree. A “limited partner” is a partner in a limited partnership that has limited liability. So we vacate and remand.

The court further noted:

So, to review, the pass-through …

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When Norway recently enacted a new wealth tax, it was billed as an easy way to make the rich “pay their fair share.” They packed their bags instead.

Within a year, hundreds of high-net-worth Norwegians fled the country, taking with them billions in capital, thousands of jobs, and a massive portion of the tax base. The exodus has been so severe that government revenue declined, serving as a case study in the inevitable response to bad tax policy.

Learning nothing, California is flirting with the same economic poison. A proposed “billionaire …

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With California’s wealth-tax debate heating up, it appears Congress does not want to be outdone. New York Democratic Representative Dan Goldman has introduced a new tax aimed at appreciated property held by high-net-worth individuals. The legislation offers yet another chance to highlight why tax proposals targeting capital all suffer from the same fatal flaws.

Goldman’s Redistribution of Billions by Instituting New High-Income Obligations on Overlooked Debt (ROBINHOOD) Act would impose a 20-percent excise tax on loans secured by appreciated assets. When a taxpayer borrows against the value of stock, real estate, or a business interest that has risen in value, …

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