Three Cheers for Passthrough Taxation
Bradley T. Borden
Brooklyn Law School
June 27, 2011
Tax Notes, p. 1353, June 2011
Brooklyn Law School, Legal Studies Paper No. 237
This report addresses recent suggestions by the Obama administration, lawmakers, and others that some passthrough entities should be taxed as corporations. It argues that passthrough taxation is the correct regime, from a technical standpoint, for many business arrangements. Applying an entity tax to those structures would be inappropriate. The report argues that an entity tax would violate notions of equity by treating members of passthrough entities differently from individuals. Next it demonstrates that a tax on passthrough entities would shift a greater share of the tax burden to middle-income individuals. Finally, the report encourages the administration and lawmakers to increase the tax burden of the super wealthy before making changes that increase the tax burden of those in the middle.
Number of Pages in PDF File: 10
Keywords: passthrough taxation, income distribution, entity taxation, partnership allocations
Date posted: June 27, 2011
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