Thursday, February 26, 2009

Obama Proposes Taxing Carried Interest as Income in 2011

Private equity underwriters (PEU's) have at least two more years of preferred taxation on investment earnings. That assumes Congress passes President Obama's budget proposal. The big money boys bankroll many Democrats and most Republicans.

The provision could fall by the wayside anytime between now and 2011. Watch for the PEU boys to throw a fit, unless they already reformed compensation knowing the rule change was coming?

This could be as effective as George W. Bush's lecturing Wall Street traders for Board approved CEO pay abuses. Stay tuned.