Private equity underwriters (PEU's) trotted out advantaged minorities to keep their significant personal income tax breaks. In an appeal to Congress, the private-equity industry argued the effort to drop their preferred treatment would harm investment firms owned by women and minorities, and discourage economic activity in neglected areas.
The Wall Street Journal reported minority and women business leaders plan to announce a new group, the Access to Capital Coalition, to oppose a move in Congress to raise taxes on carried interest, a cut of profits that hedge-fund and private-equity managers receive. Leading the fight is former basketball star Earvin "Magic" Johnson, now chairman and chief executive of Johnson Development Corp., which invests in bringing businesses into urban areas.
What's at stake is the tax rate on hedge fund and private equity profits passed onto managers. Current law allows the already highly paid fund managers to pay only 15% in taxes on "carried interest", while normal income tax rates are 35%. The Private Equity Council understands Democratic leaders desire to help minorities and is working hard to paint the issue in that light.
Not long ago, President Bush visited a small business owner and community banker at an Urban Trust Bank located not far from the White House. It was none other than billionaire Bob Johnson of the above mentioned Johnson Development Corp., ex BET owner, current owner of the NBA's Charlotte Bobcats and WNBA's Charlotte Sting, and joint venture partner with the Carlyle Group.
Meanwhile that minority bank did a deal with Goldman Sachs on college loans and may already have its minority designation from the U.S. Treasury, which brings certain benefits. Treasury Chief Hank Paulson is the ex-CEO of Goldman Sachs and might grease the skids for Urban Trust's minority designation.
A few months ago the Treasury did a piece on the state of black owned banks with Mr. Johnson's getting prominent attention. It states "the bank is federally chartered and owned by RLJ, a development company headed by the BET founder" while elsewhere in the piece it referred to Bob Johnson as a "billionaire entrepreneur." That same RLJ Companies signed the deal with the Carlyle Group in 2005.
The issue here is the tax rate on profits distributed to already highly paid fund managers. The smoke and mirrors being tossed out by the private equity industry is laughable. Bringing in billionaires to pass them off as regular struggling business folks is George W. Bush worthy. The question is whether Dirty Max Baucus and Charlie Rangel will buy the bull excrement carted around by the PEU boys. Max has a history of taking PEU money. Will the odd cast of characters ensure PEU managers get to keep more than the average citizen for their ten minutes work? Or will someone stand up and cut their preferred taxes?
The Wall Street Journal reported minority and women business leaders plan to announce a new group, the Access to Capital Coalition, to oppose a move in Congress to raise taxes on carried interest, a cut of profits that hedge-fund and private-equity managers receive. Leading the fight is former basketball star Earvin "Magic" Johnson, now chairman and chief executive of Johnson Development Corp., which invests in bringing businesses into urban areas.
What's at stake is the tax rate on hedge fund and private equity profits passed onto managers. Current law allows the already highly paid fund managers to pay only 15% in taxes on "carried interest", while normal income tax rates are 35%. The Private Equity Council understands Democratic leaders desire to help minorities and is working hard to paint the issue in that light.
Not long ago, President Bush visited a small business owner and community banker at an Urban Trust Bank located not far from the White House. It was none other than billionaire Bob Johnson of the above mentioned Johnson Development Corp., ex BET owner, current owner of the NBA's Charlotte Bobcats and WNBA's Charlotte Sting, and joint venture partner with the Carlyle Group.
Meanwhile that minority bank did a deal with Goldman Sachs on college loans and may already have its minority designation from the U.S. Treasury, which brings certain benefits. Treasury Chief Hank Paulson is the ex-CEO of Goldman Sachs and might grease the skids for Urban Trust's minority designation.
A few months ago the Treasury did a piece on the state of black owned banks with Mr. Johnson's getting prominent attention. It states "the bank is federally chartered and owned by RLJ, a development company headed by the BET founder" while elsewhere in the piece it referred to Bob Johnson as a "billionaire entrepreneur." That same RLJ Companies signed the deal with the Carlyle Group in 2005.
The issue here is the tax rate on profits distributed to already highly paid fund managers. The smoke and mirrors being tossed out by the private equity industry is laughable. Bringing in billionaires to pass them off as regular struggling business folks is George W. Bush worthy. The question is whether Dirty Max Baucus and Charlie Rangel will buy the bull excrement carted around by the PEU boys. Max has a history of taking PEU money. Will the odd cast of characters ensure PEU managers get to keep more than the average citizen for their ten minutes work? Or will someone stand up and cut their preferred taxes?
