A Few Crumbs For Passthrough TaxationIn our April post on Passthrough Taxation, we discussed the broad policy proposals from President Trump and Congressional Republicans as they relate to the taxation of passthrough entities. Although the concept of a 25% tax on passthrough entities was available at the time, few details had been discussed or released. In a recent speech at the Delivering Alpha conference in New York, Treasury Secretary Mnuchin provided the first of any such details that have been made available by any of the “Big Six” or other members of the Trump Administration. September 14, 2017
In a recent speech, Treasury Secretary Mnuchin provided additional clarity on this point when he said that certain services companies (such as accounting firms) will not qualify for the lower passthrough rates contemplated in the Trump tax reform plan. However, a business “that’s creating manufacturing jobs [is] going to get the benefit of that [lower] rate because that’s going to be passed through to help create jobs and better wages.” Although this released detail provides some clarity about how the Trump administration is considering to tax passthrough entities, many fundamental decisions about such a regime still have to be decided.