Tuesday, 4 August 2015
Last updated 10 hours ago
Feb 5 2013 | 2:31am ET
Democrats are taking President Barack Obama's call for higher taxes on carried interest seriously.
Rep. Sander Levin (D-Mich.), the ranking minority member of the tax-writing House Ways and Means Committee, said that the party would seek to close the so-called carried-interest loophole, which allows hedge and private equity fund managers to pay the lower capital-gains rate on their performance fee income.
"They're managing other people's money, so why should they get a capital gains rate when people who also risk their time pay ordinary income tax if it reaps benefits?" Levin asked during an appearance on Bloomberg Television. "That's the basic issue. It's, I think, as the president made clear, inescapable."
"There's a matter of fairness, and you need to redesign the tax code with equity in mid."
Obama said on Sunday during an interview aired prior to the Super Bowl that he would not seek any further tax rate increases, but that more new revenue was required. The president singled out carried interest as one place it could be found.
Under current tax law, performance fee income is taxed as capital gains, whose rate tops out at 23.8%. The top rate for ordinary income is 39.6%.
It's not at all clear that Levin and Obama will get their way: Republicans have consistently opposed and stopped legislation closing the carried-interest loophole, and they remain in control of the House of Representatives.
May 27 2015 | 2:15pm ET
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