Ways and Means Chairman "Would Not Be Inclined"
to Consider Taxing Passthroughs
Investors in MLPs and other passthrough entities concerned about reports of a Treasury proposal to tax passthrough entities with income over a certain amount as corporations should be relieved to know that the idea is apparently a non-starter in the House of Representatives. According to The Hill newspaper, Ways and Means Committee Chairman Dave Camp (R-MI), when asked about the proposal, threw cold water on the idea, saying, “It’s not something I’d be inclined to consider.”
Camp’s counterpart, Finance Committee Chairman Max Baucus (D-MT), on the other hand, has been quoted as saying, "We're going to maybe have to look at passthroughs, say they've got to be treated as corporations if they earn above a certain income. It's one possibility." In direct conversation with NAPTP representatives, however, Senator Baucus has indicated that he was not concerned about pipeline PTPs. From his comments it is clear that he understands the vital role that MLPs play in energy delivery infrastructure. In any case, even if Baucus were to support taxation of some passthroughs and convinced the Senate to adopt such a proposal, Camp’s statement makes it clear that it would go no further.
In addition, an unnamed Administration official was quoted in The Hill as saying: "No decisions have been made about the substantive content of any specific reform proposal or the timing or manner in which the administration will push this dialogue forward."