This is unlikely to be abolished by Congress. These States also offer exemptions for pension plans. Asset protection trust legislation has been enacted in 19 jurisdictions, designed to shift the balance of advantage from the creditors and in favour of the beneficiaries. This power extends to preventing the bankrupt from leaving the country and to imprisonment for contempt. The concept of electing transparency began with the S Corporation.
Partnerships are effectively transparent, as is the grantor trust.
A corporation is never transparent, nor is an organisation like an insurance company or a business trust that is treated as an association taxable as a corporation under regulations. An LLC is transparent unless it elects otherwise, as is a partnership. The Regulations list the foreign entities which are treated as non-transparent. If at least one member of an entity has unlimited liability, it will be treated as transparent unless it elects otherwise. If it is not on the list and all members have limited liability, it will be not transparent in the absence of an election otherwise, but it can elect to be transparent.