Democrats Eye Hedge Funds, Hedge Fund Managers In Tax Bills

Mar 18 2011 | 1:26pm ET

One of the namesakes of last year's financial regulation reform bill is proposing a big new tax on hedge funds and other financial firms.

Rep. Barney Frank (D-Mass.), now in the minority in the House of Representatives, has introduced a bill that would have hedge funds with more than $10 billion in assets, and other financial firms with more than $50 billion in assets, pay a collective $2.5 billion. The money would be used to save four housing programs that Republicans want to cut in an effort to slash the budget deficit.

Frank had proposed a similar levy to pay for his Dodd-Frank law, but it was dropped to win Republican support. It would seem to have a similarly slim chance of passing this year, with Republicans now in control of the House and in greater numbers in the Senate.

Frank's bill follows another bill introduced by a Democratic representative, Illinois' Jan Schakowsky, that would hit hedge fund managers personally. Schakowsky's bill would boost the top rate of tax in the U.S. from 35% to 49% for people who earn $1 billion or more.

The current tax code "fails to distinguish the merely 'well-off' from the 'super-duper rich,'" Schakowsky wrote in the Huffington Post.

Her bill, which has next to no chance of passing, would also increased taxes by at least 10% on everyone who earns at least $1 million.


In Depth

Debunking Conventional Investment Wisdom

Feb 8 2017 | 3:22pm ET

Due diligence in the hedge fund world has long involved some combination of the...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

iCapital Network: The Trump Effect On Direct Lending

Feb 23 2017 | 4:21pm ET

The arrival of the Trump Administration has raised questions among private debt...