that has reignited President Joe Biden’s domestic agenda includes a revenue raiser that would go after the private equity industry’s most treasured tax break.
“We just learned that the economy just shrank for the second quarter in a row. Prices are going through the roof for families and employers. Now, some in Washington want to move forward with a new tax on private investment that will hurt jobs, pensions, and small businesses,” said Drew Maloney, president and CEO of the private equity industry association the American Investment Council.before they break for the summer recess after next week.
Private equity has long benefited from low interest rates that pumped up the size of their deals, amplified their returns and made it easier to raise money from public pensions and sovereign wealth funds. Rising rates will make it much tougher to sell the businesses they bought through their investment funds — particularly for those who larded up their portfolio companies with cheap debt during the boom times.
Many Democrats, as well as some Republicans, have argued that the carried interest generated by fund managers often resembles income because they’re not putting much of their own capital at risk. “Alternative asset managers, including hedge funds, crossover funds, and private credit funds, manage $1.5 trillion on behalf of pensions, foundations, and endowments,” Managed Funds Association President and CEO Bryan Corbett said in a statement. “This proposal would punish entrepreneurs in investment partnerships by not affording them the benefit of long-term capital gains treatment.”
Don't worry, the inflation accelerated by the Dems tax and spend bill will be 'transitory'.👀😮 Fool me once, shame on you. Fool me twice, thrice and more, I must be a Democrat voter.