Investment executives relayed to Congress last week that its proposal to raise the taxes paid by hedge fund and private equity managers could harm the economy and financial markets, according to the Los Angeles Times.“There is no justification” for changing the way managers are taxed,” said Bruce Rosenblum, chairman of the Private Equity Council and managing director of the Carlyle Group, in testimony before the House Ways and Means Committee.

Hedge fund managers have been able to get around a loophole in the tax code, and are able to pay lower tax rates on their income. Mangers typically get 20% of the profits, known as carried interest, and those are taxed at the 15% capital gains rate rather than the ordinary income rate, which can be as high as 35%.

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