1. Short title This Act may be cited as the Main Street Fairness Act . 2. Business income of pass-through entities and individuals (a) Qualified business income taxed at corporate rate Section 1 of the Internal Revenue Code of 1986 is amended by redesignating subsection (i) as subjection (j) and by inserting after subsection (h) the following: (i) Qualified business income (1) In general If a taxpayer has qualified business income for any taxable year, the tax imposed by this section for such taxable year shall not exceed the sum of— (A) a tax computed at the rates and in the same manner as if this subsection had not been enacted on the greater of— (i) taxable income reduced by the sum of net capital gain plus qualified business income, or (ii) the amount determined under clause (i) plus so much of qualified business income that, when added together, would not be taxed at a rate greater than the maximum rate in effect under section 11(b), (B) tax on qualified business income reduced by the amount of qualified business income on which a tax is determined under subparagraph (A) (if any), determined under section 11 for the taxable year by treating qualified business income as taxable income of a corporation, plus (C) a tax on net capital gain, computed as if subsection (h) imposed a tax on net capital gain. (2) Qualified business income defined For purposes of this subsection— (A) Qualified business income The term qualified business income means all items of income, deduction, loss, or credit properly attributable to the taxpayer from the active conduct of a trade or business in which— (i) in the case of a partnership, the taxpayer holds a capital or profits interest, (ii) in the case of an S corporation, the taxpayer is a shareholder, (iii) in the case of a sole proprietorship or an entity otherwise disregarded as separate from its sole owner, the taxpayer is the sole owner, and (iv) in the case of a trust or estate, the taxpayer is a beneficiary. (B) Net capital gain Such term shall not include any item taken