The House Ways and Means Committee held hearings on proposals to raise taxes on managers of private equity firms and hedge funds, and to combat the expanding impact of the alternative minimum tax, as well as listening to testimony about the impact of the Bush tax cuts.

The subject of the hearings, led by Chairman Charles Rangel, R-N.Y., was a "fair and equitable tax policy for America's working families." Rangel said the original focus had been the AMT, but that the question of taxation of carried interest had been an outgrowth of that effort. The carried interest classification allows the managers of hedge funds and private equity firms to be taxed at a 15 percent rate, whereas critics believe they should be taxed on their earnings as ordinary income at rates as high as 35 percent. Any attempt to lessen the impact of the AMT on taxxpayers would involve raising revenue from other sources.

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