New York Times- Leaders of the tax-writing committees in Congress are considering a new proposal to end a little-known tax break that has allowed wealthy financiers who run private equity firms and hedge funds to cut their total income tax bills by billions of dollars, aides to lawmakers say.
The proposal would have a far broader effect than more modest legislation introduced last week by Senate tax writers to increase taxes on private equity firms that go public. That bill covered only a handful of firms, including the Blackstone Group, the private equity firm run by Stephen Schwarzman that is planning to sell shares to investors tomorrow.
By contrast, the new proposal would affect many more firms and could raise $4 billion to $6 billion annually. It may be attached to a tax bill expected as early as July as a way of helping offset the cost to the Treasury of relieving the growing burden of the alternative minimum tax on large numbers of taxpayers, aides said.
