Changes to Senate GOP tax plan may benefit Trump

Changes to Senate GOP tax plan may benefit Trump
© Camille Fine

President Trump may benefit from changes to the Senate GOP's tax plan, The Washington Post reports.

A change being weighed by Republicans includes expanding a tax credit that lets certain entities decrease their taxable income. The change regards pass-through entities.

Pass-throughs are companies such as sole proprietorships and partnerships that are taxed through the individual code. Most U.S. businesses, including many small businesses, are pass-through entities.

ADVERTISEMENT

Trump has investment stakes in about 500 entities that may be impacted by these potential changes, according to the report.

“You hold interests as the sole or principal owner in approximately 500 separate entities,” Morgan Lewis attorneys Sheri Dillon and William Nelson wrote in a letter released last year by the Trump campaign.

“Because you operate these businesses almost exclusively through sole proprietorships and/or closely held partnerships, your personal federal income tax returns are inordinately large and complex for an individual.”

Raj Shah, the White House's deputy press secretary said in a statement that the president's top priorities are "delivering tax cuts for the middle class and making our businesses competitive again."

The Senate tax bill now would create a 17.4 percent deduction for pass-through income, but pass-throughs would see less of a tax cut than corporations, which would get their rate slashed from 35 to 20 percent.

Sen. Steve DainesSteven (Steve) David DainesBullock drops White House bid, won't run for Senate Senate approves stopgap bill to prevent shutdown Perry replacement moves closer to confirmation despite questions on Ukraine MORE (R-Mont.) is protesting that the bill treats corporations better than pass-through businesses.

“I want to see changes to the tax cut bill that ensure main street businesses are not put at a competitive disadvantage against large corporations,” Daines said in a statement. “Two-thirds of our job creation comes from main street businesses and I’m doing what I can to make sure all of America is stronger and more competitive. Before I can support this bill, this improvement needs to be made.”

And Sen. Ron JohnsonRonald (Ron) Harold JohnsonHere are the Senate Republicans who could vote to convict Trump GOP senators request interview with former DNC contractor to probe possible Ukraine ties Both sides have reason to want speedy Trump impeachment trial MORE (R-Wis.) told Wisconsin reporters Monday that he would vote against the bill in the Senate Budget Committee on Tuesday afternoon if a change to the pass-through provision hasn’t been made by then.

Senate GOP leaders and administration officials have been trying to address the concerns of Johnson, possibly by increasing the pass-through deduction to 20 percent.

Trump on Monday night tweeted that the tax bill is "coming along very well," and specifically mentioned pass-throughs.

"With just a few changes, some mathematical, the middle class and job producers can get even more in actual dollars and savings and the pass through provision becomes simpler and really works well!" he tweeted.