An increased tax on executives at private equity firms and hedge funds will probably be included in legislation extending jobless benefits and a package of tax cuts, the U.S. House's top tax writer said.
House Ways and Means Committee Chairman Sander Levin, D-Mich., said lawmakers will likely seek to raise the tax on so-called carried interest to help finance the bill. He said details are being worked out.
House Speaker Nancy Pelosi, D-Calif., said the legislation would be taken up next week by Mr. Levin's committee.
Mr. Levin said he was unsure of the schedule, though he said he anticipated the bill would reach the House floor in the next few weeks. Lawmakers are “pretty close” to reaching an agreement on the overall measure, he said.
“We're going to get this done this month — that we're determined to do,” he said.
Sen. Dick Durbin, D-Ill., said the Senate would push to approve the legislation before leaving for its Memorial Day recess. The latest extension in unemployment benefits that Congress passed earlier this year expires early next month.
The House has approved tax increases on carried interest three times in recent years, only to see the measures die in the Senate. The proposal has won broader support this year amid the search for revenue.
Managers of investment partnerships typically are paid 2% of fund assets as an annual management fee and 20% of the profit earned for investors above certain levels. While the management fee is taxed as income, the share of profit, known as carried interest, is taxed at the lower capital gains rate, currently 15% and slated to rise to 20% in 2011.
