Thursday, 26 November 2015
Last updated 21 hours ago
Feb 5 2010 | 12:14pm ET
U.S. Treasury Secretary Timothy Geithner said the White House would fight to close the so-called “carried interest” loophole that taxes alternative investment managers at the capital gains rate on their share of a fund’s profits.
Asked by Sen. Sheldon Whitehouse (D-R.I.) if President Barack Obama, who included the closing of the loophole in his budget this year, was only “nominally” supporting the oft-proposed and oft-rejected measure, Geithner said he and the administration would “fight for it.”
“Even though the measure doesn’t produce a lot of revenue, it’s good economic policy,” Geithner told the Senate Budget Committee of a plan which would increase taxes on hedge fund and private equity managers by $24 billion over the next decade. The secretary said passing the measure would help restore “balance and fairness” to the tax system, and that he would push his British counterparts to adopt a similar measure.
Under the current tax regime, alternative investments managers pay only the lower capital gains rate—currently 15%—on their performance fee income. Obama’s plan would tax it as ordinary income, with a rate that currently tops out at 35% and would increase to 39.6% under Obama’s budget.
Despite the backing of the White House, it is far from certain that the carried-interest provision will pass. Sen. Debbie Stabenow (D-Mich.) last month predicted that it would not be part of the Senate budget bill.
Oct 21 2015 | 10:41am ET
One of the most unique charity benefits in the hedge fund industry, A Leg To Stand On's (ALTSO's) Hedge Fund Rocktoberfest - NYC, raised nearly $500,000 last Thursday thanks to the generous support of major sponsors and nearly 1,400 attendees from the Tri-State finance, business and hedge fund communities. Read more…