Congress is considering two measures that would raise taxes on private equity firms, Roll Call reports. The first measure would apply to publicly traded partnerships, changing their tax structure from the capital gains to the corporate rate, while the second would raise taxes on profits used to compensate hedge fund managers, or “carried interest.”

Senate Finance Chairman Max Baucus (D-Mont.) and ranking member Chuck Grassley (R-Iowa) are behind the first proposal.

“I’m not going to stand by and watch a significant part of our economy escape the corporate tax system while still accessing corporate markets,” Grassley recently said.

Leading the movement for the second amendment is Rep. Sander Levin (D-Mich.), a senior member of the Ways and Means Committee, who has sponsored a bill that would change capital gains tax raised on carried interest to private equity managers to regular income tax rates, which can be as much as 35% for those in the highest tax bracket.

An academic study estimates that if carried interest was taxed at regular income tax rates, it would net the government $2 billion to $3 billion a year.

Opponents say that because of the risks in venture capitalism, private equity managers should continue to be taxed at capital gains rates. They also say that not only could the higher tax rates harm small businesses and pension funds, but the economy overall.

Meanwhile, Sen. Charles Schumer (D-N.Y.) is drafting a bill that would raise taxes on carried interest across all industries, including real estate, oil and gas and shopping centers.

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