A proposed change in the tax code could slim some hedge fund managers’ paychecks, according to the International Herald Tribune. Senate Finance Committee Chairman Max Baucus (D-Mont.) and member Charles Grassley (R-Ia.) introduced a bill last week to increase taxes on private equity firms that go public. There is speculation that in upcoming weeks, a similar bill aimed at hedge funds and private equity companies will hit the Congressional floor. Presently, the performance fees managers levy are taxed at the 15% capital gains rate, rather than the higher income tax rate of 35%. The tax, if adopted, could mean $4 billion to $6 billion more in government coffers, and help offset the alternative minimum tax many Americans now pay, according to the Treasury department. Many credit the tax advantage with helping the incredible wealth among hedge fund managers. The U.S. Chamber of Commerce and the nascent Private Equity Council have begun ardent lobbying efforts against the proposal. “It gives an advantage to some people depending on how they set up their tax structure,” said U.S. House Ways and Means Committee Chairman Charles Rangel (D-N.Y.). “And we believe that’s not how it should be.” The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.
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