Despite the easy passage of Rep. Eric Cantor’s Small Business Tax Relief bill in the House of Representatives, RIA firms aren’t likely to be counting on any tax savings at this point.
The White House has already indicated it would veto the bill should it pass the Senate, which many analysts have said is unlikely. “My impression is that this is more symbolic …. rather than tax legislation that actually has the likelihood of seeing the light of day,” according to Michael Kitces, partner with RIA Pinnacle Advisory.
The H.R. 9 bill would allow businesses with fewer than 500 employees to take a tax deduction equal to 20% of their active business income for one year. Should the bill become law “it would help all of our members,” according to Chris Paulitz, a spokesman for advocacy group the Financial Services Institute. The bill passed the House 235 to 173 on April 19, with 1 member voting present.