Three Cheers for Passthrough Taxation

10 Pages Posted: 27 Jun 2011

Date Written: June 27, 2011


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.

Keywords: passthrough taxation, income distribution, entity taxation, partnership allocations

Suggested Citation

Borden, Bradley T., Three Cheers for Passthrough Taxation (June 27, 2011). Tax Notes, p. 1353, June 2011; Brooklyn Law School, Legal Studies Paper No. 237. Available at SSRN:

Bradley T. Borden (Contact Author)

Brooklyn Law School ( email )

250 Joralemon Street
Brooklyn, NY 11201
United States


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