House Ways and Means Committee Chairman Charles Rangel, D-N.Y., plans to hold a hearing on fairness and equity in the Tax Code.
The hearing, scheduled to take place on Sept. 6, will focus on issues such as the tax treatment of investment fund managers and the impact of the alternative minimum tax on working families. "This hearing will examine a number of tax provisions to determine whether they are functioning fairly and equitably," said Rangel in a statement.
The Senate Finance Committee has also been holding hearings on the taxation of private equity firms and hedge funds as carried interest, and plans to continue them with a hearing on pension issues scheduled for the same day.
Rangel's home state colleague, Sen. Charles Schumer, D-N.Y., has expressed skepticism about raising taxes on carried interest just for managers of private equity firms and hedge funds. Currently, carried interest is taxed at the 15 percent capital gains tax rate for partnerships, but proponents say the firms and their managers should pay the same as the corporate income tax, which could raise the rate to 35 percent. They point to the huge profits made by the Blackstone Group and its CEO, Stephen Schwarzman, when the firm did its IPO in June.
Schumer contends that the tax hike should apply to other industries beyond just private equity and hedge funds. He is drafting legislation to include all industries, not just the financial industry, so the impact of a hike would not fall mainly on New York. Among the industries that could be affected would be real estate, energy and venture capital. Broadening the tax hike, on the other hand, would effectively increase opposition to the effort.
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