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Tax News
Proposals to Tax Carried Interest at Ordinary Rates are Back
September 26, 2011
Legislative Actions
It seems that the efforts to tax investment fund managers’ performance compensation at ordinary income rates had subsided for a long time. Those readers that have followed the issue know that these efforts have been largely unsuccessful since the early inception of the first Carried Interest bill by Senator Levin in year 2007. Now, the Carried Interest proposal resurfaces yet again in the form of a revenue raiser in another Obama favored legislation titled the “American Jobs Act of 2011” (S.1549; H.R.2911). While there are some substantive differences from prior installments, the gist of the proposed law remains the same. If enacted, the bill will profoundly affect the investment fund industry. Obviously, there is a big IF.  While I am hesitant about speculating whether this bill will ever come to fruition, I can’t help but think that if it will ever pass, it ought to be now, when the fiscal budget is in despair and politicians have some particularly hard choices to make. We shall see. The full text of the bill could be found and tracked at OpenCongress.
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Tags: American Jobs Act of 2011, Carrid Interest, carry, investment managers compensation, investment managers promote, Levin bill, Sec. 710