While much of the press is focused on the potential reduction in tax rates for corporations, pass-through entities - ranging from mom and pops to large hedge funds - should pay close attention to the discussions regarding the pass-through tax rate.
To some extent, there is less certainty regarding potential reductions to the pass-through tax rates, thus companies should closely monitor the situation to incorporate effective tax planning.
That 20 percent corporate rate is now in question. President Donald Trump is pushing for 15 percent. House Speaker Paul D. Ryan (R-Wis.) revised his goal upward to 22.5 percent. House Republican aides are privately saying it will be difficult to get the rate below 28 percent. Without a big corporate rate cut, a preferential passthrough rate might not be possible.
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