Overview

Title

To amend the Internal Revenue Code of 1986 to make permanent the deduction for qualified business income.

ELI5 AI

S. 213 is a bill that wants to make a tax rule last forever, so small businesses can keep saving money on their taxes.

Summary AI

S. 213, known as the "Main Street Tax Certainty Act," aims to amend the Internal Revenue Code of 1986. This bill intends to make permanent the deduction for qualified business income by removing subsection (i) from Section 199A of the Code. The bill was introduced in the Senate on January 23, 2025, by Mr. Daines and several co-sponsors and referred to the Committee on Finance for further consideration.

Published

2025-01-23
Congress: 119
Session: 1
Chamber: SENATE
Status: Introduced in Senate
Date: 2025-01-23
Package ID: BILLS-119s213is

Keywords AI

internal revenue code qualified business income s. 213 main street tax certainty act deduction permanent section 199a tax deduction senate bill fiscal impact tax code amendment

Sources

Bill Statistics

Size

Sections:
2
Words:
319
Pages:
2
Sentences:
7

Language

Nouns: 132
Verbs: 13
Adjectives: 8
Adverbs: 1
Numbers: 7
Entities: 43

Complexity

Average Token Length:
3.56
Average Sentence Length:
45.57
Token Entropy:
4.06
Readability (ARI):
20.98

AnalysisAI

General Summary of the Bill

The proposed bill, titled the “Main Street Tax Certainty Act,” aims to amend the Internal Revenue Code of 1986 to make the deduction for qualified business income permanent. Introduced in the Senate on January 23, 2025, by a group of Senators led by Mr. Daines, the bill's primary focus is on altering Section 199A of the existing tax code. This section currently allows certain business income to be deducted, which can reduce taxable income and, consequently, tax liability for eligible businesses. The proposed legislative change involves the removal of a specific subsection within this tax code provision, effectively cementing the deduction's permanence.

Summary of Significant Issues

A notable issue within the bill is the brevity of the amendment's language. By simply stating the removal of subsection (i) from Section 199A, the bill lacks detailed explanation and context. This omission leaves room for interpretation and may lead to uncertainty among stakeholders about the precise legislative intent and its overall impact.

Additionally, the bill does not include a fiscal impact analysis, which is critical for understanding how this permanent deduction might affect government revenue and budgetary allocations. Without this information, stakeholders cannot fully assess the financial implications of the proposed change.

Moreover, the absence of detailed context makes it challenging for individuals unfamiliar with the current tax code to understand the significance and potential impact of making this deduction permanent.

Impact on the Public and Stakeholders

Broad Public Impact

Making the deduction for qualified business income permanent could have varying effects on the public. For business owners, particularly those in qualifying sectors, this change could provide financial stability and predictability in tax planning. By reducing taxable income, businesses could see a decrease in their overall tax burden, potentially leading to increased investments and economic activity.

From a broader economic perspective, the permanency of this deduction could incentivize growth among small to medium-sized enterprises (SMEs), often referred to as "Main Street" businesses. This could positively impact employment and community development, as these businesses reinvest the saved resources.

Impact on Specific Stakeholders

Business Owners
For business owners, particularly those running pass-through entities like sole proprietorships, partnerships, and S-corporations, the permanent deduction could mean considerable tax savings. These businesses would have more certainty in tax planning, allowing for strategic investments and long-term growth planning.

Government and Public Services
Given the absence of a fiscal analysis, there is a concern that the reduction in tax revenue from making the deduction permanent could impact government budgets. This might lead to reduced funding for public services or require adjustments in other areas of the tax system to compensate for the potential shortfall.

Tax Professionals
The bill would also impact tax professionals and advisors. They would need to advise their clients on the newfound permanence of this deduction and help navigate its implications within broader financial strategies.

In conclusion, while the Main Street Tax Certainty Act proposes a change that might foster economic growth and support businesses, it also raises questions about fiscal implications and accessibility for those unfamiliar with tax legislation. Without further details and analyses, it remains difficult to gauge the full scope of this legislative proposal's impact.

Issues

  • The amendment text in Section 2 is minimal and lacks detailed explanation on the impact of striking subsection (i) from Section 199A of the Internal Revenue Code of 1986, leaving stakeholders uncertain about the specific legal changes (SECTIONS, Section 2).

  • There is no fiscal impact analysis or estimation provided regarding how making the deduction permanent will affect government revenue, which is crucial for understanding potential budgetary implications (SECTIONS, Section 2).

  • The bill does not provide context or explanation on how making the deduction for qualified business income permanent will affect various stakeholders such as businesses, individuals, or the overall economy (SECTIONS, Section 2).

  • The language used in the bill assumes familiarity with Section 199A, potentially making it less accessible or understandable for individuals not well-versed in current tax code specifics (SECTIONS, Section 2).

  • The introduction of the bill, listing numerous sponsors, suggests broad political support, which might indicate political significance and public interest in understanding its ramifications (TEXT, Introduction).

Sections

Sections are presented as they are annotated in the original legislative text. Any missing headers, numbers, or non-consecutive order is due to the original text.

1. Short title Read Opens in new tab

Summary AI

The first section of the bill states its short title, which is “Main Street Tax Certainty Act.”

2. Deduction for qualified business income made permanent Read Opens in new tab

Summary AI

Section 2 of the bill makes permanent the deduction for qualified business income by amending the Internal Revenue Code to remove a specific provision.