by Linda Beale
Levin proposed carried interest bill (HR 4016)
Sander Levin has proposed H.R. 4016, which would characterize allocation of partnership profits in respect of a “profits interest” received for services–i.e., carried interest compensation– of investment fund managers as ordinary income subject to employment taxes rather than allowing it to be treated as a share of the profits of a partnership, often garnering capital gains treatment if the partnership has mostly capital gains items. The technical description provides both a good brief description of the issue and the way this bill addresses it.
There is absolutely no reason why income earned for managing other people’s money shouldn’t be taxed in the same way as income earned teaching or working in a factory. This loophole for years has unfairly enabled some of the highest-paid individuals in the country to sharply reduce their tax bills and it is time to close it once and for all.
Partnerships that hold investments assets or real estate held for rental or investment would be covered.
Let’s hope Congress does the right thing here.
crossposted with ataxingmatter