October 03, 2007
My interview with Andrew Ross Sorkin appears in the NYT Dealbook print section today, or click through to Dealbook.
The carried interest buzz today is all about Senator Schumer, who has announced that he'll be introducing a broader carried interest bill very soon. From here on out, I think the serious carried interest debate is about scope and timing, as well as the mechanics of the reform.
At one extreme, you could see a very broad carried interest bill, hitting all industries, enacted in November. At the other extreme, you could see the Baucus-Grassley PTP bill enacted, which would hit only a handful of PE firms, and that bill might be coupled with long transition relief rules. Broader carried interest reform would have to wait. (For more, see Taxing Blackstone.)
I would have thought that the narrower PTP bill would be more likely to succeed in the short run, but Schumer's bill could certainly change the dynamics. Any predictions?
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1. Posted by M. Hodak on October 6, 2007 @ 11:50 | Permalink
They're both an uphill fight. Schumer has a lot of clout, and he simply won't let his NY/Wall Street consituents get singled out for a huge tax increase. On the other hand, Schumer's proposal to raise everyone's taxes (an easy decision for him) will be a harder sell in Congress overall, especially as long as Bush remains president.
My prediction is that both versions stall until the next election.
