A Reuters news report said the National Conference on Public Employee Retirement Systems (NCPERS) told leaders of the U.S. Senate Finance Committee in a September 4 letter that it was withdrawing its previously expressed position against two tax bills focusing on carried interest – private equity firms’ profits.
NCPERS had stated its earlier opposition in an August 24 letter to the lawmakers, expressing worry that tax increases would hurt the economy, public pension funds, and public employees. In the latest communication, the group said while some members feel the bills could affect public employees, the majority of its members do not share that opinion and that it would take no stance on the legislative proposals, according to Reuters.
Reuters said Senators Max Baucus, (D-Montana), Finance Committee chairman, and Charles Grassley (R-Iowa), the panel’s ranking Republican, introduced a bill in June to force publicly traded partnerships deriving income from investment adviser and asset management services to pay the federal corporate tax rate of up to 35% instead of partners’ current 15%.
Private equity firms are typically taxed at 15% as private partnerships and their profits – known as carried interest – are also taxed at 15% as capital gains, Reuters said.
Also in June,14 Democratic members of the U.S. House of Representatives introduced a bill to raise taxes on carried interest, the news service reported.