Masters in Business · Wednesday, September 23, 2026
Changes in the tax code, particularly since the 1986 Tax Reform Act, have significantly encouraged the growth of pass-through businesses. These reforms, along with subsequent tax cuts and deductions, have made it more advantageous for entrepreneurs to structure their businesses as pass-through entities, leading to substantial business formation and economic activity.
“So it's been, it's like a great deal to be a business owner. And it's very important to be a business owner as a pass-through for most of these businesses because you get better tax treatment. And that's led to this massive growth in the pass-through sector.”
“So you guys essentially give that aspect of the 1986 Tax Reform Act credit for unleashing a whole new wave of business formation and entrepreneurial activity.”