Mark Mazur, the Department of the Treasury's assistant secretary for tax policy, said last week that he could envision a corporate-only tax reform effort in which pass-throughs are offered only targeted benefits instead of a rate cut.
The Obama administration has long supported corporate-only tax reform, while many congressional lawmakers have said that any tax reform that fails to address individual rates would be unfair to pass-through businesses. Mazur suggested that provisions such as increased Section 179 business expensing limits or an expansion of the cash method of accounting could ensure pass-through businesses don't subsidize corporate tax reform.
The position is consistent with the administration's tax reform framework from 2012, which called for reducing the corporate rate to 28%. Many congressional Republicans have criticized the administration for failing to offer a more detailed tax reform proposal, and Mazur said Treasury could consider releasing a more detailed plan in the next 6 to 12 months if it offers "the best path forward."
Grant Thornton LLP has been a strong advocate for taxing all business income at the same rate, regardless of entity. See our proposal for providing equal rates for all businesses.
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