Private equity and other private fund managers would pay regular tax rates under a legislative proposal introduced Thursday that would end carried interest.
Co-sponsors Sen. Tammy Baldwin, D-Wis., and House Ways and Means Committee ranking member Sander Levin, D-Mich., introduced the Carried Interest Fairness Act of 2015.
“We should not be allowing individuals to be taxed at a lower rate on managing other people’s money than ordinary hardworking Americans,” Mr. Levin said in a statement. “There’s no reason that these fund managers shouldn’t be paying their fair share of taxes on their income just like everyone else.”
Steve Judge, president and CEO of the Private Equity Growth Capital Council, said in a statement the proposal “would discourage growth and investment, would make the tax code more complex and would make the tax code less fair,” because investment service partnerships would be the only partnerships not able to use the capital gains rate.
The House has passed legislation ending or limiting the carried interest tax rate four previous times, most recently in 2010, but those attempts died in the Senate.