Republicans and Democrats want to close this tax loophole
Whither carried interest?听The New York Times听against the loophole, fueled by this week鈥檚听. 鈥淐arried interest鈥� refers to the share of investment gains earned as compensation by hedge fund managers, private equity executives, and venture capital partners. If the fund performs well, the manager does well鈥攁nd his compensation is taxed as capital gains, not ordinary income. Last year the top 25 hedge fund managers earned about $467 million each. Is their tax treatment听 fair? TPC鈥檚 Eric Toder doesn鈥檛 think so: 鈥淟ook at salesmen who work on commission. Their compensation is at risk, too, but they don鈥檛 get to treat their income like a capital gain.鈥�
Speaking of fairness: Mass transit riders should get the same tax break as car commuters, say 52 House members.听US drivers can set aside $250 a month in pre-tax income to pay for commuter parking. That鈥檚 not fair, says a bipartisan group US representatives, since mass transit users can only exclude $130 a month for their commuting costs. The House members听听to the House Ways & Means Committee asking for equal treatment, but the idea will probably get derailed.
Senate pressure grows to ditch the 鈥淐adillac Tax.鈥澨�Nevada Republican Dean Heller and New Mexico Democrat Martin Heinrich introduced a bill to repeal the 40 percent tax on high cost health insurance plans yesterday. Repeal would add $87 billion to the debt over 10 years and President Obama would veto it, even if Congress could pass the measure.
In Colorado, a pot tax holiday may have boosted sales, or just delayed purchases.听Under its听Taxpayer Bill of Rights, the state had to waive听听on recreational marijuana on September 16 because听 revenues exceeded budget expectations. Colorado collects a 10 percent retail tax on buyers and a 15 percent excise tax on growers. On the holiday, sales at one dispensary exceeded combined sales in the previous five days. The听Associated Pressreports that shoppers saved about $20 an ounce, while pot growers saved about $300 a pound. Question is, did people really buy more or did they just wait a few days to take advantage of the tax break?
And in Boston, maybe a tax on booze.听City Council President Bill Linehan wants a听听sold in the city. Under the proposal, annual tax revenue of $20 million would fund addiction services. If the City Council passes the measure after a hearing September 24, the proposal would need to be approved by the state legislature and signed by the governor. Massachusetts residents voted in 2011 to eliminate the state鈥檚 6.25 percent alcohol sales tax.
The European Union can now cast a wider net.听All member countries have now agreed to cooperate with the听听(Wall Street Journal听paywall). Regulators have asked for ten to twelve tax agreements with companies from each nation. They鈥檒l be able to see how tax rulings are used in each nation, and determine whether any break EU law.
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