The White House announced the tax reform program on April 26. The Trump government plans to lower the corporate income tax rate (1120C) from the current 35% to 15%. Under this framework of the new tax rate, will the four types of company tax (C Corp, S Corp, Partnership & Disregarded Entity-LLC) face new choices and interactions?

Partnership entities pays federal tax at individual level and in New York State. (The annual fees from USD25 to USD4,500 are negligible for New York State IT-204-LL limited liability partnerships.) Profits above USD85,000 in New York City are taxed 4%. (USD85,000 to USD135,000 are still partially deductible.) The overall tax rate is lower than S, but when turning a profit, the general partner must pay 15.3% of social security and medical tax. Remuneration of partners likewise pays social security and medial tax, similar to Sole. As a result, P (including LLP), if paying partners remuneration and gaining profits, the total tax will exceed S. However, the advantage of P is that there is no limit to the number of shareholders and restriction on citizenship and green card, as set in S, and there is no restriction as in S that shareholders must be separate individuals (e.g., individuals & single member LLC). P partners can be individuals, general partnerships, limited partnerships, or even C and S companies.