House Ways and Means Committee member Vern Buchanan, R-Fla, released H.R. 5076, the "Main Street Fairness Act," which would provide a legislative framework for the business equivalency rate (BER) that Grant Thornton LLP has long championed.

The bill would ensure that the qualified business income (QBI) earned by a pass-through entity would be taxed at rates equivalent to income earned by a corporation. Under current law, the top marginal tax rate for corporations is 35%, while the top rate on individuals is 39.6% without accounting for self-employment tax or the additional tax under Section 1411 related to net investment income.

The Main Street Fairness Act has support from a number of trade associations, including the National Association of Manufacturers and the National Retail Federation. Grant Thornton has long advocated for comprehensive tax reform that would lower business tax rates for both corporations and pass-through entities. If comprehensive reform is not possible, Grant Thornton believes that a BER could be a reasonable alternative to ensure that QBI is taxed at an equivalent rate as income earned by corporations.

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