"Assaulting" Private Equity Kingpins

May 7 (EIRNS) --The Wall Street Journal today whines that what they call a 133% increase in taxes on private equity funds' profits amounts to an "assault on the investor class." Not even at the stage of hearings yet, the measure is simply the subject of "informal meeting" of the Senate Finance Committee this week, and already they're nervous. Senate Finance Committee Chairman Max Baucus was grilled at the National Press Club, Monday, and forced to reassure all that he was "nowhere close" to legislation, and that everyone needed to just "keep their shirts on."

As to the 133% increase, it is the difference between the 15% tax rate on capital gains, and the 35% managers should pay, were their phenomenal incomes taxed the way everyone else's are. Managers, who normally take 2% of the total funds under management, along with 20% of any profits, can pay the lower rate if they can pass their income off as "capital gains," as well as postpone and possibly avoid payment completely, if profits are quickly reinvested. Last year, a handful of fund managers paid themselves over a billion dollars in "salary."

A Congressional aide has told EIR that the measure has support in the House, even among Republicans.