House Votes to Boost Taxes on Private Equity Managers
Date: December 10, 2009
The U.S. House voted to more than double a tax on income earned by executives of private equity and venture capital firms to pay for the renewal of dozens of tax breaks.
The House voted 241-181 today, largely along party lines, to end fund managers’ ability to pay the 15 percent capital- gains tax rate on the share of fund profits they are paid as compensation. The proposal, unlikely to pass the Senate, would tax those payments – known as carried interest – as ordinary income with a top 35 percent rate.
“Those who invest their own money will continue to receive capital gains tax treatment,” said Michigan Democrat Sander Levin. “Those who manage other people’s money will have to pay ordinary income tax like everybody else who performs services.”
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Source: Bloomberg
