Senator: Carried-Interest Tax Hike Won’t Pass

Jan 26 2010 | 11:51am ET

The carried-interest tax loophole will not be closed, a member of the U.S. Senate Finance Committee said, which means that hedge fund and private equity fund managers won’t see their tax bills double this year.

Sen. Debbie Stabenow (D-Mich.) said it was unlikely that the Senate would pass a provision that would treat carried-interest, or a manager’s share of a fund’s profits, as ordinary income, rather than capital gains. That means that performance fees would be taxed at a top rate of 35%, rather than 15%.

The U.S. House of Representatives has already approved the closing of the loophole as part of a bill extended $31 billion in tax cuts.

“I don’t think it’s going to be part of the Senate bill,” Stabenow told Crain’s Detroit Business. “While members of the committee have brought it up, it won’t be part of any bill we pass.”

Interestingly, the House bill’s provision was championed by Rep. Sander Levin (D-Mich.), the older brother of the state’s senior senator, Sen. Carl Levin (D-Mich.).

“This is a basic issue of fairness,” the elder Levin told Crain’s. “If you put your own money at risk, you get taxed at the capital gains rate. If you put other peoples’ money at risk, your profit should be taxed as ordinary income.”

In Depth

Financial Industry Blockchain Consortium R3 To Open-Source Platform Code

Oct 20 2016 | 9:03pm ET

Bitcoin's blockchain technology has spawned a flurry of activity among fintech startups...


U.S. Trust's Beard: The Rapid Growth of the Art Lending Industry

Oct 7 2016 | 10:55pm ET

Alternative investment managers have emerged as some of the most significant art...

Guest Contributor

Hedge Fund Marketing – Tips for Your Initial Sales Meeting

Sep 29 2016 | 5:46pm ET

There are two main goals a hedge fund should have for an initial in-person sales...