Write-Offs: 7.14.07
Special Edition: Taxing The Carry

Posted by John Carney, Jun 14, 2007, 5:11pm

taxingprivateequity.jpgSenators Max Baucus and Charles Grassley, chairman and ranking member of the Senate Finance Committee, introduced legislation today to raise taxes on private equity firms. And, in the process, they singled out the IPO of the Blackstone Group as raising troubling tax issues.

Senate finance committee makes its move. [Bloomberg] (And here.) [Reuters]

What’s behind the sudden interest in taxing private equity? Hint: It’s spelled M-O-N-E-Y. [Wall Street Journal]

The Blackstone IPO is tax and regulatory arbitrage [Ideoblog]

Vic Fleischer describes the bill as “pretty sensible.” [The Conglomerate]

0Recommend this! 8Comments
Posted in: Private Equity, Senate, Write-Offs

Comments

Posted by Bulging Bracket, Jun 14, 2007 6:57PM

Nothing more than a shakedown. Since they write the laws it's "legal" but it's no better than the Mob. Actually it's worse, since the Mob takes less money, doesn't try to screw with your business, and doesn't libel you on a daily basis.

Politicians are scum squared. Firstly because they're (almost all) lawyers, then because they're politicians.

Posted by , Jun 14, 2007 7:46PM

where are my sign offs?

Posted by Percy Walker, Jun 14, 2007 9:08PM

To be clear, though, this proposed legislation isn't the dreaded changing of the tax treatment of carried interest (although it is a harbinger of that evil). This just means that Blackstone (assuming it still goes public) and other publicly-traded investment advisors organized as flow-through entities will be taxed as corporations.

Posted by Dealbreaker going downhill, Jun 14, 2007 10:18PM

What the hell is the matter with you people, a CFO of a major corp is fired for mysterious 'personal' reasons, some random woman in CA is suing him to give her the house he promised -- and I have to wait to read it on the front page of the *Wall Street Journal* that this guy was "keeping" several women at the same time in various parts of the country?!?!? The WSJ even dug up an "engagement" photo of the guy from a local paper, why the hell weren't you guys all over this story??

Posted by mikey, Jun 15, 2007 7:56AM

5:11, talk about burning the midnight oil !

Posted by , Jun 15, 2007 8:10AM

nobody pays these people, and they get more clicks on speculation about bess's private - or sometimes public - life than they do about real news. that is why only 1 in 5 posts is about a "deal"

its not DB going downhill its the readership

ps keith rules

Posted by , Jun 15, 2007 11:40AM

Percy - the corp tax is worse than carry as ordinary income - OI is taxed at up to 39%, depending on the bracket of the recipient, but the corp tax means 35% at the corp level, then 15% at the shareholder level.

Posted by Percy Walker, Jun 15, 2007 1:08PM

True, anonymous, but my point was that the legislation is extremely limited in its effect on PE firms -- Fortress, Blackstone (maybe), who else?

A direct change to the treatment of carry affects us all.

Post Your Comment