US takes cautious route on private equity tax
May have trouble getting past Senate and president
The move to get US private equity firms and hedge funds to pay more taxes has
hit speed bump with reports that legislative tax writers are adopting a more
cautious approach.
According to the Washington
Post, a bold version of the new rules would have a good chance at
passing in the House of Representatives
before year’s end, but would have a harder time convincing the Senate and
President Bush.
The paper said the chairman and the ranking Republican on the Senate Finance
Committee had not yet decided whether they favour raising tax rates on the
profit paid to fund managers and therefore will go slowly on the issue.
The decision to revise the tax rules followed private-equity firms starting
to sell themselves to the public and being forced to disclose the millions of
dollars earned by their managers.
Further reading:
Darling’s private equity plans give AIM investors sleepless
nights