CONTRIBUTED BY
Asher Bearman
asher.bearman@dlapiper.com

Ways and Means Committee Ranking Member Sander Levin (D-MI) remains intent on increasing tax rates on carried interest (the profits funds managers earn on thier portfolios, which currently are taxed at 15%).  At the end of last week, he announced his intention to reintroduce legislation that would make carried interest taxable at ordinary income rates.  Calling the tax on carry at capital gains a “loophole” is a little misleading in my mind, but that’s politics. 

His website also includes a timeline summary of the prior (failed) legislation attempts:

Timeline of Action on Carried Interest Legislation:

June 22, 2007 – Rep. Levin introduces H.R. 2834 to treat carried interest as ordinary income.  Original co-sponsors include Ways & Means Chairman Rangel and Financial Services Chairman Frank. 

Nov. 9, 2007 – The House of Representatives approves carried interest legislation as part of H.R. 3996, which included tax extenders, an AMT “patch” and other provisions. 

June 22, 2008 – The House of Representatives approves carried interest legislation as part of H.R. 6275, the Alternative Minimum Tax Relief Act of 2008. 

April 2, 2009 – Rep. Levin reintroduces legislation to treat carried interest as ordinary income (H.R. 1935) for the 111th Congress. 

Dec. 9, 2009 – The House of Representatives approves carried interest legislation as part of H.R. 4213, which extended various expiring tax provisions. 

May 28, 2010 – The House of Representatives approves carried interest legislation as part of amendments to the Senate-passed version of H.R. 4213.

2012 – Rep. Levin to reintroduce carried interest legislation.