Geithner wants to "reexamine" pass-through tax entities

Getting rid of the pass-through rules completely would wreck every small business in the country, as substantially all of them pass their income through to the owners for tax purposes.

This is merely an attempt to impose double taxation on all business income. Tax it once at the business and again at the individual level. Most businesses that do not pay tax at the business level do not claim any deduction for compensation and benefits provided to owners of the business. If they are to be taxed at the business level, then the businesses will be able to claim deductions for the compensation and benefits paid to owners. This will reduce/eliminate the income of most pass-through entities and result in insignificant additional tax revenue.

The only way to increase total tax collections significantly would be to completely redefine taxable transfers between owners and businesses. And to do so would impact the economic decision making that goes into creating businesses. This is not something to be undertaken lightly as it will have a substantial impact on the economy as it will change the risks/rewards of businesses.