WASHINGTON --Grant Thornton LLP has released the statement below supporting legislation introduced by Congressman Vern Buchanan (FL-16). The legislation addresses business-equivalency tax rates for pass-through organizations.
Grant Thornton welcomes the legislation introduced today by Congressman Vern Buchanan (FL-16): The Main Street Fairness Act. This legislation, when enacted, will make a significant difference for pass-through organizations around the country. More than 80 percent of businesses in the United States are pass-through entities represented by limited liability corporations (LLCs), limited liability partnerships (LLPs), S-corporations and sole proprietorships. Pass-through business owners are taxed on individual returns at individual rates.
Under current law, pass-through business owners pay a top tax rate of 39.6 percent whereas corporations pay tax at 35 percent, a difference of 4.6 percent. This rate disparity puts pass-throughs at a competitive disadvantage and hinders growth. The Main Street Fairness Act as introduced would close this differential, so that all businesses regardless of entity are subject to the same rates.
Grant Thornton encourages Congress to pass the Main Street Fairness Act this year.
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