As usual, now that an election has occurred some thoughts turn to tax reform. Not that the idea is ever too far away.
The current idea is to revamp just the tax rules for corporations, though most believe that this will go nowhere. But there is bipartisan agreement that the 35% maximum U.S. corporate tax rate should be reduced.
Alas, dropping the corporate rate well below the rate for individuals would create a significant disadvantage to S firms, partnerships and LLCs. As flow though entities the owners of these firms pay tax on business income at individual rates.
Corporate tax reform would end many breaks that these businesses use with no offsetting rate cut for owners.
It will be interesting to see what Congress will do and the impact on the economy as well as the citizens.