Free Republic

Let the games begin. With Romney expressing his support earlier this week for extending the freeze in student loan interest rates, defusing this as a wedge issue just as the President was embarking on his college tour, Democrats in the Senate have decided to counter with, what else, the class warfare card. Via Bloomberg (emphasis added): Senate Democrats and the White House are seeking a one-year freeze in the interest rate. The $6 billion cost would be offset by limiting a tax provision that allows some owners of so-called S-corporations to avoid paying Medicare payroll taxes on their earnings, Senator...

'Loophole' Closing Eyed to Fund Student Loan Policy BY CAROL E. LEE AND JOHN D. MCKINNON [Subscriber Content Preview] The White House and Senate Democrats are looking at ending a tax provision benefiting some small business owners to pay for a year-long extension of a freeze in student loan interest rates, which are scheduled to double from 3.4% to 6.8% this summer, people familiar with the discussions said. The measure would change a feature of tax law that critics say has allowed many owners of small businesses—particularly those known as Subchapter S corporations—to escape employment taxes on much of their...

In a recent testimony from Treasury Secretary Geithner to the Senate Finance Committee one major point was that when considering corporate tax reform: “Congress has to revisit this basic question about whether it makes sense for us as a country to allow certain businesses to choose whether they’re treated as corporations for tax purposes or not.” Secretary Geithner later went on to reference non-corporate businesses specifically. Essentially, this means that Secretary Geithner is considering ending the pass-through tax treatment of businesses. This refers to partnerships, limited liability companies, S-Corporations, and any other type of business entity where individuals will report...