President Obama pushed for his jobs plan during a rally on Wednesday at North Carolina State University. Dealbook reports that private equity executives and hedge fund managers are apoplectic that President Obama has included a provision in his jobs bill that they are calling punitive and discriminatory.
Buried on Page 139 of the American Jobs Act is a measure that would tax profits on the sale of an investment management partnership — like a private equity, venture capital or hedge fund firm — at ordinary income rates of 35 percent. Proceeds from the sales of these and other United States businesses are now taxed at a 15 percent capital gains rate.
Critics say that if this so-called enterprise value tax proposal becomes law, investment management partnerships would be the only businesses in the United States where proceeds from the sale of the business would be taxed at ordinary income rates.
“The enterprise value provision that the administration has included as part of an already flawed carried-interest proposal violates basic tax fairness policy and seems to single out the private equity, venture capital and real estate industries in a punitive fashion,” said Steve Judge, interim chief executive of the Private Equity Growth Capital Council, the industry’s trade group….
Read more at http://dealbook.nytimes.com/2011/09/14/white-house-rankles-wall-street-with-enterprise-value-tax/?nl=business&emc=dlbkpma1
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