Nat Worden
That said, the proposed legislation hardly singles out these firms. It merely closes a loophole by requiring them to pay the same income tax rates as their mutual fund counterparts, as well as doctors and lawyers and every other professional in the country.
"I do not criticize these [hedge funds and private equity firms]," said Rep. Barney Frank (D-Mass.) on the House floor last week. "I think they perform a useful economic function, but they are the wealthiest people in the country and in the history of the world on the whole. The notion that if they have to pay somewhat more tax up to the level that most of us pay on income, they will somehow go on an economic strike and stop doing these things is badly flawed." Meanwhile, the third quarter is expected to show the first year-over-year decline in corporate profits for the S&P 500 since 2000, signaling that tax revenues for the federal government, which skyrocketed in recent years without coming close to erasing budget deficits, may be at a peak. Some critics have objected to the measure on grounds that it would raise taxes on smaller business partnerships that hardly fit the profile of elite private equity firms, like Blackstone Group (BX Quote - Cramer on BX - Stock Picks) and Fortress Investment Group (FIG Quote - Cramer on FIG - Stock Picks). But Bankman has drafted language that could limit the legislation to larger firms.
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