Republican presidential nominee Donald Trump has dropped mention of a major tax cut for businesses organized as pass-through entities, including partnerships, from his tax overhaul proposals, according to the latest version of those plans.
Trump had previously pitched the proposal for a 15 percent tax rate on income from partnerships and limited liability companies as a boon for small business -- but many hedge funds, private equity firms and other large-scale businesses use the structure. Such businesses don’t pay income taxes themselves, but pass their earnings to their owners, who are taxed at individual rates. The top individual tax rate is 39.6 percent -- meaning that the original proposal would have amounted to a tax cut for many.
A version of his tax plan released Thursday, in conjunction with a speech Trump delivered to the Economic Club of New York, made no mention of the proposed pass-through rate.
Alan Cole, an economist with the Washington-based Tax Foundation, said Trump’s campaign told him via e-mail that, going forward, “the 15 percent rate only applies to businesses that are taxed as corporations.” Corporations currently pay a top statutory income tax rate of 35 percent. Cole and others at the right-leaning tax-policy group have helped evaluate Trump’s tax plan, including by evaluating possible changes to it at the campaign’s request.
Trump’s campaign didn’t immediately respond to a request for comment.
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