CPAs’ cats everywhere are all like…
It’s been a wild week in the tax world, even if it’s mostly been bluster. Talk of tax cuts has corporate executives, rich people, and sitting U.S. Presidents all hot and bothered. But it probably has a lot of accounting firm partners fantasizing too, not only because they’re dreaming of the fees they’d rake in but because accounting firms, virtually all of them pass-through entities, themselves would benefit.
Buried in this Wall Street Journal article on the risks of big tax-rate differentials between individuals and business is a quote from a CPA that serves as evidence of this.
One adviser to hedge funds, Michael Laveman of accounting firm EisnerAmper LLP, said the proposal would act as a tax cut for hedge-fund owners who share management fee income. Management fees, he said, are typically taxed at the current top 39.6% rate.
Mr. Laveman’s own firm, also a partnership, would be among the beneficiaries. “I’m trying not to tell my wife about the huge tax break we are about to get,” he said.
I think there are a few ways of interpreting this: 1) Mr. Laveman is super excited and doesn’t want to get Mrs. Laveman’s hopes up yet; 2) Mr. Laveman is pessimistic about the tax reform bullet points’ chances and doesn’t want to get Mrs. Lavemean’s hopes up; 3) Mrs. Laveman is the level-headed one, will tell Mr. Laveman that Trump is an idiot and that no one is going to go for this cockamamie plan, crushing his spirit.
I imagine the conversation around CPAs’ dinner tables is riveting this week.