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Business group backs carried interest tax break
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| Contributor | RP |
| Last Edited | RP Sep 04, 2007 09:05pm |
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| Category | Announcement |
| News Date | Tuesday, September 4, 2007 10:15:00 PM UTC0:0 |
| Description | The largest U.S. business lobbying group said on Tuesday it will unveil a study showing how the economy would suffer if Congress closes what critics call a tax loophole for rich private equity fund managers.
Congress is considering bills to raise taxes on the senior executives of private equity firms, which buy out poorly performing corporations, overhaul them, and then resell them.
These executives typically keep 20 percent of the profits from their deals, in an arrangement known as carried interest. Under present law, carried interest gains are taxed at the 15-percent capital gains tax rate.
One bill in Congress would require private equity and hedge fund managers to pay the higher ordinary income tax rate of up to 35 percent on their carried interest gains.
The private equity industry -- flush with cash and working hard to expand its clout in Washington through lobbying and campaign donations -- argues that carried interest is appropriately taxed at the capital gains rate.
Critics say private equity and hedge fund managers are unfairly exploiting a tax loophole that should be closed. |
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