Hundreds of Organizations Urge Congress to Close Tax Loophole for Fund Managers
by Brian Gumm, 9/5/2007
-For Immediate Release-
September 5, 2007
- Brian Gumm, OMB Watch, (202) 234-8494, email@example.com
Steve Wamhoff, Citizens for Tax Justice, (202) 299-1066
Hundreds of Organizations Urge Congress to Close Tax Loophole for Private Equity and Hedge Fund Managers
WASHINGTON, Sept. 5, 2007—More than 300 national, state and local nonprofit organizations signed a letter sent today to members of Congress urging them to eliminate a tax loophole that allows mega-rich private equity and hedge fund managers to pay federal taxes at a lower rate than middle-income people. Among the signatories are unions, faith-based organizations, advocates for children and families, social service nonprofits, and tax fairness advocates.
The loophole in question allows private equity fund managers, who can earn hundreds of millions of dollars a year in compensation, to pay federal taxes at a lower rate than middle-income individuals. Specifically, the loophole allows the part of fund managers' compensation called "carried interest" to be taxed at the low 15 percent rate for capital gains. Taxpayers earning as much as private equity fund managers usually are taxed at the top ordinary income tax rate of 35 percent.
The letter was delivered a day before the House Ways and Means Committee is scheduled to hold a hearing to examine the carried interest loophole, as well as other tax fairness issues. This fall, the Ways and Means Committee is expected to consider legislation introduced by Rep. Sander Levin (D-MI) that would eliminate this unfair loophole. The Senate Finance Committee will also hold a hearing Sept. 6 on the carried interest loophole — its third this year.
A copy of the letter is available at http://www.ctj.org/pdf/carriedinterestsignon080707.pdf.
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