Friday, May 21, 2010

PEU Big Guns Lobby on Capital Hill

Blacktone's Stephen Schwarzman and Carlyle Group co-founder David Rubenstein pressed the flesh with lawmakers over "carried interest" taxation. Bloomberg reported:

Stephen Schwarzman, chairman of New York-based Blackstone, was in Washington yesterday to meet with lawmakers. He stood outside the Senate chamber in the U.S. Capitol carrying a three- ring binder, and greeted senators on their way to a vote.

Private equity underwriters (PEU's) are taxed at a 15% rate on their livelihood (investment gains), which can run into the billions. Ordinary citizens pay up to 35% on income. Three times the U.S. Senate blocked prior bills that would've eliminated PEU's preferred taxation. Schwarzman knew where to put his energy. He wasn't alone.

Schwarzman, David Rubenstein, co-founder of the Washington- based Carlyle Group, and Glenn Hutchins, co-founder of Menlo Park, California-based Silver Lake, were dispatched by the Private Equity Council, a Washington trade group, to argue against the tax increase, according to people familiar with the decision. Blackstone and Carlyle declined to comment. A Silver Lake spokeswoman didn’t return messages seeking comment.

These men are frequent visitors to Obama's White House. They clearly have elected officials ear. They also have a tax dodging workaround. Is it domestic or offshore?

Update: EPJ has an e-mail from the PEU Council mobilizing members on this issue.