Tags: kevin brady | tax reform | house and ways mean committee | taxes

Brady Unveils Proposed Carried Interest Tweak

Brady Unveils Proposed Carried Interest Tweak

House Ways and Means Committee Chairman Kevin Brady. (AP Photo/J. Scott Applewhite)

Monday, 06 November 2017 08:49 PM

House Ways and Means Chairman Kevin Brady presented his committee with a series of last-minute changes to the House tax bill, including a limit to the so-called carried-interest tax break by tripling the length of time assets would have to be held to qualify for the capital gains rate of 23.8 percent.

Brady had said Monday morning during a CNBC interview that he intended to attach a two-year holding period to carried interest. The tax break is used widely among private-equity managers, venture capitalists, certain real estate investors and hedge fund managers.

Carried interest is the portion of an investment fund’s profit -- usually a 20 percent share -- that is paid to investment managers. Currently, tax authorities treat that income as capital gains, making it eligible for the 23.8 percent -- on gains from assets held for a year or more. The top individual income tax rate is 39.6 percent.

The late changes provoked furious reactions from Democrats after they appeared five-and-a-half hours into an expected four-day markup.

“This is disgraceful. This has been just the worst kind of process,” Representative Sander Levin of Michigan, a former chairman of the panel, told Brady in a tense back-and-forth. “You’ve made a mockery out of this committee. A mockery.”

Other provisions that Brady proposed Monday evening include modifications to the tax treatment of payments for employer-provided dependent care and the earned income tax credit program. His amendment would also decrease the number of universities facing a proposed excise tax of 1.4 percent. Under the change, institutions with endowment assets of at least $250,000 per student would face the tax -- up from an original $100,000 level.

Brady said the amendment also “better tailors” international base erosion rules that are aimed at preventing multinational corporations from shifting their earnings overseas to lower-tax jurisdictions.

“As the legislative process moves forward, we will continue to work to ensure that the international tax rules operate to appropriately protect the U.S. tax base while making America one of the best places in the world to hire, invest, and do business,” Brady said in a statement.

On the other side of the Capitol, Senate Democrats are scheduled to meet Tuesday with White House Legislative Affairs Director Marc Short and top economic adviser Gary Cohn.

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House Ways and Means Chairman Kevin Brady presented his committee with a series of last-minute changes to the House tax bill.
kevin brady, tax reform, house and ways mean committee, taxes
Monday, 06 November 2017 08:49 PM
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