Monday, December 6, 2010

Private Equity Wins Again

Finalternatives reports:
Sen. Max Baucus (D-Mont.) has dropped a provision in the contentious tax cut bill that would have more than doubled taxes on carried interest. Under a loophole in the tax laws, hedge and private equity fund managers pay only the capital gains rate on their share of a fund’s profit, rather than the ordinary income rate. The former is currently just 15%, the latter can be as high as 35%. …

The House of Representatives, since Democrats took control in 2006, has consistently passed bills closing the carried interest loophole, and the increased taxes have been pushed for by President Barack Obama and Treasury Secretary Timothy Geithner. But the measures have always fallen short in the Senate.
I'm not against tax cuts, but this one is for the David Rubenstein-type oligarchs.

Leona Helmsley was right, "Only the little people pay taxes." They sent her to prison pretty much becasue of that statement.


  1. Will Max hold out until 2012, when Carlyle goes public?

    The carry saved Carlyle over $250 million in taxes so far in 2010.

  2. Warren Buffet is not going to like this. That was his whole basis for supporting tax increases was to hammer private equity. Looks like Warren will still have to compete with P/E with both paying the same level of taxes on gains.