Bloomberg- House Ways and Means Committee Chairman Charles Rangel said he will propose a $48 billion tax increase on executives of hedge funds and private-equity firms to help pay for curbing thealternative minimum tax this year.
The New York Democrat said the proposal would more than double the tax rate on so-called carried interest, the compensation that executives at buyout and venture-capital firms, as well as real estate and oil and gas partnerships, receive for managing investments. It also would require hedge- fund managers to pay tax on income they defer in offshore accounts, he said.
The so-called patch, which lawmakers must pass this year to forestall a tax increase on 21 million households, will set up a showdown between Democrats who want to offset the lost revenue with new levies and Republicans who oppose any increase. The carried-interest measure also will be part of a broader overhaul that contains a permanent repeal of the minimum tax, a tax-rate surcharge on wealthy households and a lower corporate rate.
