Attempt to increase hedge fund tax shakes Connecticut industry

Raising taxes on hedge fund managers, an idea that has plenty of popular support but has failed to gain traction, is under scrutiny in Washington again, the Connecticut Mirror reports. President Obama last week proposed ending the current tax treatment given to hedge fund managers, whose income is considered "carried interest" and taxed at the capital gains rate of 15 percent.

Obama wants that income -- a share of the profits on an investment fund -- to be taxed like wages, which for the wealthiest Americans could be as high a rate as 39 percent. Needless to say, hedge fund managers are some of the richest people in the world, and according to Forbes, are getting richer. Thirty-nine hedge fund managers were on last year's Forbes list of the world's 400 richest billionaires.

Rep. Sander Levin, a Michigan Democrat, also wants to close what he calls a loophole that benefits these billionaires. He introduced legislation this week that would raise taxes on hedge fund managers, resulting in billions of dollars of new revenue for the U.S. Treasury. That would have a big impact in Connecticut, home to more than 200 hedge funds and third in the world, after London and New York, in the size of its hedge fund industry. So the Connecticut hedge fund industry is fighting back...

http://www.ctmirror.org/story/15479/attempt-increase-hedge-fund-tax-shakes-connecticut-industry