Yahoo Finance Accountants in Congress describe how Trump's tax reform affects businesses
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The tax overhaul passed by Congress in December did more than just change the tax code for individuals, it also drastically overhauled the way businesses handle taxes in the U.S.
Business taxes are handled much differently than individual taxes, and Rep. Mike Conaway (R-Texas) said in the 32 years since Ronald Reagan’s 1986 tax reform, the tax code had gotten more complicated and burdensome for businesses through small changes. Rep. Conaway said the new code was a way to simplify that.
But not everyone agrees — not even every Republican. Senator Ron Johnson (R-Wisc.) doesn’t think the new reform simplified the business tax system, but he still voted for its passage.
“We actually made it more complex. My proposal would have really simplified business tax system by taking the five percent of American corporations that were C Corps, I would have turned them to pass-through entities.”
A pass-through entity is a business that organizes in one of several fashions so that the business income passes through to the individual owners and is taxed at the individual level.
Rep. Collin Peterson (D-Minn.) voted against the tax reform, saying any tax reform is going to produce winners and losers.
“I’m getting a lot of people complaining to me — corporations — that they got their taxes raised. Because they make a hundred grand they ended up having a significant increase.”
