President Barack Obama wants to eliminate the lower carried-interest tax rate paid by general partners in private equity and other alternative investments as part of his $1.5 trillion fiscal year 2013 budget proposal sent to Congress on Monday.
The White House estimated that taxing carried interest at regular income tax rates would generate revenue to the federal government of $13 billion over 10 years. But the issue is not likely to gain traction in Congress “even with the highly charged election-year rhetoric,” Steve Judge, president and CEO of the Private Equity Growth Capital Council, said in a statement Monday.
The administration also repeated its call to let the Pension Benefit Guaranty Corp. raise premiums and adjust them according to the funded status of individual pension plans as a way to encourage full funding.
The proposed change, estimated to generate $16 billion over the next decade, would come only after two years of study and public comment.
The Department of Labor retirement program expenditures would stay at current levels, with more emphasis on electronic filing.
Also under the proposal, financial firms with more than $50 billion in assets would be assessed a Financial Crisis Responsibility Fee to help fund federal bailout expenditures.