Senators Working on "Pass-Through" Parity
Senator Ron Johnson of Wisconsin is concerned about the treatment of pass-through businesses in the current tax reform bill.
Currently it is proposed that C Corporations are taxed at 20% and pass-through filers are going to be taxed at over 30%, so what is a business owner to do.
Convert to a C Corporation – right?
This issue is at the top of the list of concerns for Senator Ron Johnson of Wisconsin. His argument is that if there is a big difference in tax rates, tax payers are just going to convert to C Corporations in order to lower their tax bill.
Unfortunately for the government deficit, this mass conversion to C Corporations was not factored into the tax collection equation.
So Mr. Johnson is working hard to determine at what point does the taxpayer figure the tax benefit is just not worth the conversion to a C Corporation. Along with Senator Johnson is Senator Daines of Montana, both are bringing up the issue.
Senator Thune of South Dakota said it best – parity between pass-through businesses and corporations: “It’s easier said than done.”
Here is a link for the Wall Street Journal article: