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News & Press: Industry

Treasury Department Proposes New Tax Rules For Pass-Through Businesses.

Friday, August 10, 2018   (0 Comments)
Posted by: Alyce Ryan
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AICC, through its membership in the Council of Manufacturing Associations, is pleased to present the "Manufacturing Economic Daily Newsletter” from the NATIONAL ASSOCIATION OF MANUFACTURERS (NAM).

Reuters (8/8, Morgan) reports that on Wednesday the Treasury Department “proposed tax regulations for a new 20 percent income tax deduction for owners of businesses organized as pass-through entities, including rules to prevent the measure from becoming a tax loophole for wealthy Americans.” The newly-proposed rules “are intended to provide everything pass-through owners need to comply with the Republican Tax Cuts and Jobs Act, a sweeping overhaul of the US tax code that President Donald Trump signed into law in December.” “Pass-through” businesses are defined as small businesses without shareholders that “pass profits through to their owners as personal income.” Treasury Secretary Steven Mnuchin is quoted on the proposed rules, saying, “The pass-through deduction is an important tax cut for small- and mid-size businesses, reducing their effective tax rates to their lowest levels since the 1930s. This 20-percent deduction will lead to more investment in US companies and higher wages for hardworking Americans.” According to Reuters, “Trump’s tax overhaul provided permanent tax relief to corporations, which saw their tax rate slashed from 35 percent to 21 percent and an end to US taxes on much of their foreign profits.” However, “Pass-through owners got only temporary relief under the law’s individual tax provisions, which are due to expire after 2025.” 

 

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