By Jay Heflin - 05/25/10 02:42 PM EDT
Rep. Jared Polis (D-Colo.) in last night's Rules Committee hearing on the legislation said he could not support the bill because its carried interest proposal goes "too far from one extreme to the other."
He urged Levin to change the provision because some investment managers do have capital that is at-risk. Rules Chairwoman Louise Slaughter (D-N.Y.) shut down the request before Levin could comment on it.
A common argument being raised by lawmakers in both parties is that the extender bill provides temporary tax relief in exchange for permanent tax increases, like the one on carried interest.
The Real Estate Roundtable and the Private Equity Council say the change to carried interest creates a 157 percent tax increase on real estate, venture and private equity investment partnerships, which provide capital to businesses and start-up companies.
According to the groups, the tax on carried interest is much lower in other countries, ranging from 0 percent in India and 10 percent in China to 18 percent in the U.K. If the tax increase on carried interest is enacted as-is, U.S. companies will be at a competitive disadvantage with their foreign counterparts.
"It is a job creation program for our global competitors," the groups contend.