Investment group blasts tax increase on carried interest

Earlier today, Senate Finance Chairman Max BaucusMax Sieben BaucusFarmers hit Trump on trade in new ad Feinstein’s trouble underlines Democratic Party’s shift to left 2020 Dems pose a big dilemma for Schumer MORE (D-Mont.) and House Ways and Means Chairman Sandy Levin (D-Mich.) announced a deal had been struck on the extender bill. 

A rough estimate shows the legislation will cost at least $200 billion, but only a portion of its measures will be offset. The tax increase on carried interest is expected to be a major revenue source to help pay for the bill. 

Under the legislation, sources told The Hill that carried interest for the first 2 years will be taxed at ordinary income and capital gains rates — a 50/50 split, which amounts to a tax rate of roughly 30 percent. That split changes to 75/25 after 2 years, which amounts to a 35 percent rate.

A score for this provision from the Joint Committee on Taxation has not been released. 

The bill is expected to go before the House Rules Committee later Thursday with a chamber vote on it tomorrow.