Trump’s tax plan emphasizes cutting the corporate tax rate and simplifying the individual income tax system. However, the plan would cut not only the corporate tax rate, but the rate for all types of businesses regardless of income level or business type. Whether a business is a hugely profitable multinational corporation or a tiny sole proprietorship, its income would be taxed at 15%.
One concern that’s been raised is that this new system would create a tax loophole that would encourage individuals to try to make their income sources qualify to register as pass-through entities such as limited liability companies (LLCs) and S corporations. Here’s what that type of strategy would entail.
