Fewer businesses (ESPECIALLY small businesses) are organized as C corporations. If the bill is cutting the corporate tax rate for the sake of creating jobs it makes no sense not to give similar breaks to LLCs and S Corps.
Um, sure it does? Again, s-corps and other pass-through entities already enjoyed a significant tax benefit over c-corps. The pass through entities aren't being double-taxed. They pay personal income taxes on their distributions, which seems fair to me. C-corps get a corporate tax cut to reduce the double taxation, and then still pay personal income tax on the distributions.
Right? So that's why the corporate income tax should be reduced: to lessen double taxation and bring them onto more equal footing with s-corps.
The question I have is why an owner (partner, shareholder, etc.) of an s-corp should pay less personal income tax than a W-2 wage earner. If the goal is to help "small businesses", the vast majority of those won't be impacted by this at all because their marginal personal income tax rate is already less than 25% (that's the proposed max rate for pass-throughs under the house bill). So the rate reduction would only seem to help folks who receive a big enough distribution from an s-corp that their marginal rate would exceed that 25%.
If we are trying to incentivize people to start businesses, seems like the s-corp structure was already a pretty good incentive: open a business and you won't pay any corporate income tax on your profits - you just pay personal income tax on what you take out of the business, same as everyone else.
I understand why Kansas eliminated taxes on s-corps: it was designed to lure businesses to Kansas. But that's a non-issue when implementing nationwide.
At the end of the day, I'm not begrudging anyone getting a better deal than me. I'm already getting a pretty sweet deal. Just seems odd to me that we'd allow two people earning the same amount to pay significantly different rates based on a legal fiction.