Higher Taxes Proposed for Firms’ Managers

[cal04]

http://dealbook.blogs.nytimes.com/2009/02/26/higher-taxes-proposed-for-firms-managers/

Executives at private equity firms, venture capital firms and hedge funds will pay an estimated $24 billion more in taxes over nine years under President Obama’s budget blueprint.

The Obama administration proposes raising taxes on these firms’ managers by treating carried interest, the portion of profits they take from successful investments, as ordinary income instead of capital gains, Bloomberg News reports. That change would increase the tax rate, starting in 2011, to 39.6 percent for most managers from the 15 percent they now pay.

The proposal applies to partnerships that receive a portion of the profits they make for their clients.

Senior Treasury officials said the tax increase would apply to all partnerships that use the carried-interest structure and would not exempt any industries. Venture capital firms have sought to be excluded from any tax increase.





Buyout, Hedge-Fund Managers Could Pay $24 Billion More in Taxes
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=auoR7FhvV12s

[aquart]

1. Good. Nice free ride for the last decade.

But the party is over.