Surely Kevin Hassett Can't Be Serious...
He's deadly serious. And stop calling him Shirley.
It is dictated in our by-laws here at NBfPB that we must link to any economist authored piece or any piece relevant to our main subject matter of economics/capital markets that references the movie "Airplane". Thus we bring you Kevin Hassett.
It is dictated in our by-laws here at NBfPB that we must link to any economist authored piece or any piece relevant to our main subject matter of economics/capital markets that references the movie "Airplane". Thus we bring you Kevin Hassett.
posted by Donny Baseball at 12:44 AM
3 Comments:
WASHINGTON -- Senate tax writers are intensifying consideration of whether to increase taxes paid by the managers of private-equity funds and other private pools of capital.
Aides to members of the Senate Finance Committee are set to meet Monday for a briefing on "taxation of private equity and carried interest," said an aide to the committee chairman, Sen. Max Baucus (D., Mont.). Tax experts and officials from the Treasury Department and Internal Revenue Service are scheduled to speak, the aide said.
The closed-door meeting is the latest sign of the Senate tax panel's interest in the issue. Tax aides to Mr. Baucus and Sen. Charles Grassley of Iowa, the ranking Republican on the committee, have met privately with tax lawyers and representatives of relevant industries. Monday's meeting will be the first of a broader group of committee aides.
Carried interest, the cut of future profits to which fund managers often are entitled, represents the vast majority of their compensation. Under a typical arrangement fund managers receive a 2% management fee and carried interest valued at 20% of realized profits. The carried interest is taxed at the capital-gains rate of 15%, not the ordinary income-tax rate of as much as 35%.
The panel hasn't released a formal legislative proposal, and aides say they are proceeding cautiously. There is mounting worry in potentially affected industries that Congress is moving toward a tax increase that would cut fund managers' profits.
Some House Democrats have been discussing the issue privately. A prominent Republican in that chamber said he thinks there should be hearings. Rep. Jim McCrery of Louisiana, the ranking Republican on the House Ways and Means Committee, said "we certainly should explore" a possible tax increase on carried interest.
"It's justifiable to think about changes," said Victor Fleischer, an associate professor at the University of Colorado Law School who was invited to present a paper on the taxation of private-equity funds at the Senate briefing. His paper proposes ways to treat carried-interest distributions as compensation income, rather than purely as investment income. "We have some of the wealthiest workers in the country paying tax at a very low rate. That's what makes the issue so striking."
Oooooohhh YES. I know all too well about this little gambit. What I can't figure out is why the Dems would stab in the back the big money that put them over the edge last November. Hedgie and PE money went big time for Dems and is lining up for Hillary and Obama. If they change this tax treatment, alot of that money will walk away.
Perhaps the Dems have figured out that if they can push the economy into recession before Nov 08, then they won't need the PE money to win. Trouble in Iraq + a recession at home = Dems wet dream. If I were the Dem, these are the two events that I would be pushing hard for in the next 12 months.
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