Private Equity Warns Against Raising Taxes

WASHINGTON -- Private equity, hedge fund and real estate executives warned senators on Tuesday that raising taxes on their firms would harm a range of companies that benefit from their investments, including developers in poor urban areas, The Associated press reported Wednesday.

At Tuesday’s Senate Finance Committee hearing, Bruce E. Rosenblum, managing director of the Carlyle Group, a Washington-based private equity firm, argued that changing the tax treatment for private equity managers would have adverse consequences, the AP reported.

“There will be deals that don’t get done. There will be entrepreneurs that won’t get funded and turnarounds that won’t get undertaken,” said Rosenblum, who also is chairman of the Private Equity Council, an industry group, the AP reported.

But a Denver venture capitalist, William Stanfill, disputed the argument, saying his colleagues have displayed a “Chicken Little” mentality in warning of dire consequences. He noted that venture capitalists are paid very well compared with other industries, the AP reported.

It makes little sense to tax teachers, chief executives or surgeons at a higher rate than private equity executives, said Joseph Bankman, a law professor at Stanford, the AP reported.

-- NYSSCPA.org News Staff

Posted on 8/1/07