Trump tax plan could provide big boost for MLPs

|By:, SA News Editor

The Trump administration's proposal to cut tax rates on pass-through businesses would deliver a windfall to investors in energy MLPs and possibly offer a much-needed boost to the group, according to a Reuters analysis.

The plan's proposed cut to the top tax rate on pass-through businesses to 15% from the current rate of up to 36.9% largely would benefit owners of private businesses, but MLP investors would receive the same treatment.

MLPs have broadly underperformed the broader stock market over the past several years, largely due to the weakness in oil prices.

Mike Bresson, a tax partner with the Baker Botts law firm in Houston says the proposed change would enhance an already superior tax structure enjoyed by MLPs, but adds "the devil is in the details, and we haven’t seen them."

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