Tax Reform Efforts May Target Pass-Through Entities

by

Via the Wall Street Journal

Pass-through entities such as s-corporations and partnerships are popular vehicles for businesses to avoid the double taxation of corporations and simplify the overall taxation of businesses. However, efforts to reform corporate taxes may require some businesses to convert from pass-through entities to ones that are taxed directly, like corporations, according to Treasury Department officials.

Supporters say the change is needed because some large businesses, including law firms and hedge funds, use pass-through entities to avoid corporate taxes, while opponents argue the move would harm small businesses by subjecting them to a higher tax rate.

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