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Mark to Market for Dead People

The President’s budget is out and, as we have in the past, we will start with a disclaimer.  Congress requires the President to issue a budget every year, and every year the President (regardless of party) complies with a ridiculously long and labored set of phone book-like documents outlining the budget.  And every year Congress yawns and says it’s dead on arrival.  So take our commentary below with a grain of salt, as most of the provisions in this budget are going nowhere, fast.

That said, the budget includes a couple tax proposals that caught the attention of our members,

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2019-02-01T20:00:11+00:00February 2, 2015|

S-Corp Payroll Tax Hike Re-Emerges

Both the Camp discussion draft and the President’s budget include provisions to expand the application of payroll taxes to S corporation income.

The White House proposal is an expanded version of efforts that failed in the Senate in 2010 and 2012, where 100 percent of income from a professional services businesses – law, accounting, consulting, etc. – organized as an S corporation, general or limited partnership, or an LLC taxed as a partnership, would be subject to SECA taxes.

The Camp provision, on the other hand, is a whole new approach that is dramatically broader than anything considered to date. 

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2019-02-01T20:05:24+00:00March 6, 2014|

Corporate-Only Tax Reform Still a Bad Idea

Today, President Obama is announcing a repackaging of the corporate tax reform proposal he put forward back in 2012. Based on the White House fact sheet, the plan is a restatement of his 2012 plan coupled with a call to raise “one-time” revenues to pay for new spending.

To recap the 2012 plan, the President proposed to:

  • Cut the C corporation top tax rate to 28 percent;
  • Reduce the top rate on C corporation manufacturers to 25 percent;
  • Eliminate tax deductions, preferences and credits used by C corporations and pass-through businesses alike to offset the lower C corporation rates; and
  • Increase expensing limits

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2019-02-01T20:08:24+00:00July 30, 2013|

More than Half of Small Business Income Targeted Under Obama Tax Hike

The S Corporation Association today responded to reports that President Obama would press to raise taxes on S corporation owners and other taxpayers earning more than $250,000 a year:

“Pass-through businesses like S corporations employ the majority of private sector workers. The President is proposing to raise taxes on a large number of their employers, putting those jobs at risk. According to the Joint Committee on Taxation, more than half of all pass-through income is taxed at the top two tax rates. Raising taxes on that much economic activity at a time when unemployment is already too high is harmful

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2019-02-01T20:18:46+00:00July 9, 2012|

Administration Offers Corporate Tax Reform

The Administration released its outline for “business” tax reform today. Described by its authors as more than a set of principles but less than a fully-realized plan, the 22-page joint Treasury-White House release raises more questions for us than it answers.

Core to the plan is a reduction in the top corporate tax rate from 35 to 28 percent. Pass-through businesses would not benefit from the rate reduction. Manufacturing businesses would see a further reduction down to 25 percent through the use of a manufacturing deduction. Advanced manufacturing would receive a yet more generous deduction.

To offset the cost of the lower

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2019-02-01T20:21:28+00:00February 22, 2012|