The GOP Tax Bill Would Increase the Pass-Through Deduction
It would also make the tax break permanent. But some small-business advocates favor a different approach. Tell us what you think!
Good Morning!
Here are today’s highlights:
In our latest podcast episode, an owner asks the 21 Hats community to help him assess the importance of business growth.
The first evidence of tariff-fueled inflation may be surfacing in home furnishings.
But some business owners say they would rather close their business than raise their prices.
It’s getting harder to get help from the SBA.
LEGISLATION
The House tax bill would increase and make permanent the tax break for pass-through companies: “To understand the full scope of the Big Beautiful Bill, you need a little context about the TCJA, or Tax Cuts and Jobs Act, an influential bill from Trump’s first term atop which this new one is built. That 2017 package cut the corporate tax rate down to 21 percent, a move which many experts said would primarily benefit larger, more mature C corps. In order to give a leg up to businesses which instead use a pass-through structure such as a sole proprietorship, S corp, or LLC, Republicans also included in the TCJA a provision called the qualified business income deduction, often called ‘199A’ after its section in the tax code.”
“The TCJA allowed for a pass-through tax deduction as high as 20 percent. Now, the new bill raises that to 23 percent and makes it permanent. That’s the biggest change in the bill for closely held businesses, says Howard Gleckman, a senior fellow in the Urban-Brookings Tax Policy Center at the Urban Institute.” READ MORE
