On Wednesday, Aug. 1, Alvin C. Warren, Ropes & Gray Professor of Law at Harvard Law School, testified before the U.S. Senate Committee on Finance at a hearing entitled, “Tax Reform: Examining the Taxation of Business Entities,” which examined the impact of tax reform on American businesses and corporations.
In his opening statement, Senate Finance Committee Chairman Max Baucus, D-Mont., described how 95 percent of all U.S. businesses today are structured as “pass-through entities,” such as partnerships, limited liability firms, sole proprietorships and S corporations. “Originally used primarily by small businesses, recent changes in the law have made it easier for medium and large businesses to be taxed as pass-throughs and still retain the benefits of limited liability,” said Baucus.
Warren emphasized three points in his testimony: “The longstanding U.S. taxation of corporate and investor income needs to be reformed to reduce economic distortions; the boundary between taxable and pass-through entities needs to be rethought to reflect changes in the legal environment and in the capital market; and reform of the taxation of business entities is extraordinarily complex because it requires consideration of a large array of different combinations of domestic and foreign income, entities and investors.”
Also testifying before the committee was HLS alum Harrison T. LeFrak ‘97, vice chairman of The LeFrak Organization, in New York City.
Warren has taught tax law and policy at Harvard Law School since 1979. He is the founding director of the HLS Fund for Tax and Fiscal Research. He is the co-author of “Integration of the U.S. Corporate and Individual Income Taxes: The Treasury Department and American Law Institute Reports “(Tax Analysts 1998, with Michael Graetz) and he wrote “Integration of Individual and Corporate Income Taxes” (American Law Institute, 1993).
Prior to joining the HLS faculty, Warren was a member of the law faculties of the University of Pennsylvania, Duke University, and the University of Connecticut. He has also been a visiting professor at Stanford and Yale. He is the recipient of a Guggenheim Fellowship and of teaching awards at Harvard, Pennsylvania and Connecticut.