MSCI Asks Congress To Preserve Tax Parity For Pass Through Businesses
U.S. House and Senate lawmakers have reintroduced legislation called the Main Street Tax Certainty Act, which would make permanent the Section 199A 20 percent deduction for qualified business income. This deduction, which was passed by Congress as part of the 2017 tax reform legislation, was designed to balance out the tax treatment between pass-through businesses and C-Corporations that benefit from the 21 percent corporate tax rate that also was part of that bill.
Because the legislation would ensure permanent tax parity for the millions of employers organized as S corporations, partnerships, and sole proprietorships, and also would provide certainty to businesses who have been devastated by the COVID-19 pandemic, MSCI recently signed onto a letter with more than 80 other organizations to support the legislation.
The letter argued, “Making the 199A deduction permanent will help millions of these pass-through businesses during this very difficult time, leading to higher economic growth and more employment.” The letter also noted that an “analysis by economists Robert Barro and Jason Furman found that, among other provisions, making the pass-through deduction permanent would result in significantly increased economic growth in the coming years.”
The letter, which is available here was sent to the leaders of the two tax-writing committees in Congress.
Stay tuned to Connecting the Dots as Congress considers whether to act on this important legislation.