Carried-Interest Tax, Volcker Rule Still Kicking

May 20 2010 | 2:12pm ET

A pair of proposals that could have a big impact on the hedge fund and private equity industries have reappeared on the floor of the U.S. Congress.

A bill that would increase taxes on performance fee income was introduced in both houses on Capitol Hill today. The proposal would close the so-called “carried-interest” loophole, which taxes a manager’s share of a fund’s profit as capital gains, rather than ordinary income.

Capital gains are taxed at 15%, while ordinary income is taxed at a top rate of 35%.

The bill would allow some carried interest to continue to be taxed as capital gains. But at least 75% of the rest would have be treated as ordinary income.

Meanwhile, Sens. Jeff Merkley (D-Ore.) and Carl Levin (D-Mich.) have amended their amendment that would tighten up the proposed Volcker rule, which would bar banks from the hedge fund and private equity industries. Republicans earlier this week blocked a vote on the rule.

The change would allow the amendment to be added to the overall financial overhaul bill even after the Senate votes to limit debate on and changes to the matter.

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...