US - Democrats introduce bill to end capital gains treatment of carried interest

As the private equity community was trying to recover from the UK Treasury Select Committee meeting last Wednesday, news of a bill in the US that proposes to end the carried interest tax advantage emerged. A group of Democratic Congressmen led by Rep. Sander Levin introduced the bill, which will require investment managers to pay ordinary income tax rates on carried interest. The capital gains rate will continue to apply to the return on capital investment managers have invested in the partnership.