Buyout Firms to Avoid a Tax Hike
Reid Passes Word Senate Won't Act
By Jeffrey H. Birnbaum
Washington Post Staff Writer
Tuesday, October 9, 2007; Page A01
Senate Majority Leader Harry M. Reid (D-Nev.) has told private-equity firms in recent weeks that a tax-hike proposal they have spent millions of dollars to defeat will not get through the Senate this year, according to executives and lobbyists.
Reid's assurance all but ends the year's highest-profile battle over a major tax increase. Democratic lawmakers, including some presidential candidates, had been pushing to more than double the tax rate on the massive earnings of private-equity managers, who the Democrats say have been chronically undertaxed.
In response, private-equity firms -- whose multibillion-dollar deals have created a class of superwealthy investors and taken some of America's large corporations private -- hired dozens of lobbyists, stepped up campaign contributions and lined up business allies to wage an unusually conspicuous lobbying blitz. Their argument was that higher taxes would run counter to accepted tax policy and slow economic growth.
Some lawmakers have touted the tax boost as a way to pay for such expensive measures as the repeal of the alternative minimum tax, which this year alone threatens to increase taxes on 23 million households. But lawmakers and lobbyists agree that if the tax is not raised this year, its chances are not strong in 2008, either; Congress tends to be leery of tax increases in election years.
In one meeting with industry representatives last month, Reid said the private-equity tax plan would not be considered in the Senate this year, according to a participant. Rather than citing the lobbying push, Reid implied that the reason had to do with the lack of time on the jammed Senate schedule.
more...
http://www.washingtonpost.com/wp-dyn/content/article/2007/10/08/AR2007100801704.html
Printer-friendly format
Email this thread to a friend
Bookmark this thread
(1000+ posts)
Send PM |
Profile |
Ignore
