Recent news reports indicate that some congressional Republicans may be amenable to a so-called "millionaire tax" that would raise the highest federal individual income tax rate to around 40%. NAIFA opposes this proposal due to the harm it would likely cause hundreds of thousands of pass-through corporations. Many owners of these small, often Main Street, businesses organized as S corporations, partnerships, and sole proprietorships would face large tax increases. 

NAIFA has joined a coalition of Main Street champions in sending a letter to Representative Jason Smith (R-MO), Chairman of the House Ways & Means Committee, and Senator Mike Crapo (R-ID), Chairman of the Senate Finance Committee, urging Congress to reject the proposed tax increase.

The "millionaire tax" would actually apply to taxpayers with incomes around $620,000 and would place an unbearable financial strain on many pass-through business owners. Those that receive the full Section 199A deduction would face marginal tax rates above 40% when the Net Investment Income Tax and state and local taxes are considered. Businesses ineligible for the full Section 199A deduction could see marginal rates exceeding 50%.

More than 95% of all U.S. businesses are pass-throughs, and they employ 62% of American workers. Increasing their tax burden is likely to stifle growth and harm local economies. Many NAIFA members are business owners and include small businesses among their insurance and financial services clients.

"Thank you for standing with the Main Street community and working to extend and make permanent the TCJA’s expiring provisions," the letter to congressional leaders says. "As Congress continues its work on a pro-growth tax bill, we urge you to reject any effort to raise tax rates."