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'Loophole' Closing Eyed to Fund Student Loan Policy BY CAROL E. LEE AND JOHN D. MCKINNON [Subscriber Content Preview] The White House and Senate Democrats are looking at ending a tax provision benefiting some small business owners to pay for a year-long extension of a freeze in student loan interest rates, which are scheduled to double from 3.4% to 6.8% this summer, people familiar with the discussions said. The measure would change a feature of tax law that critics say has allowed many owners of small businesses—particularly those known as Subchapter S corporations—to escape employment taxes on much of their...

In a recent testimony from Treasury Secretary Geithner to the Senate Finance Committee one major point was that when considering corporate tax reform: “Congress has to revisit this basic question about whether it makes sense for us as a country to allow certain businesses to choose whether they’re treated as corporations for tax purposes or not.” Secretary Geithner later went on to reference non-corporate businesses specifically. Essentially, this means that Secretary Geithner is considering ending the pass-through tax treatment of businesses. This refers to partnerships, limited liability companies, S-Corporations, and any other type of business entity where individuals will report...

While a possible increase in taxes on the "carried interest" of hedge fund and private equity money managers is getting all the attention, in the same bill Congress is also creating a tax mess for small-business owners in the form of an $11 billion tax hike over the next 10 years. The tax increase was included in H.R. 4213, a peddler's wagon of legislation (new spending, physicians' reimbursement, extensions of expired tax breaks, etc.) that was passed by the House in a narrow vote just before Memorial Day and is now being considered by the Senate. The Democratic-backed Senate version...