Sens. Christopher Dodd (D., Conn.) and Richard Shelby (R., Ala.) wrote
Securities and Exchange Commission
Chairman Christopher Cox to ask for more information on the so-called Blackstone tax hike.
The lawmakers -- chairman and ranking member of the Senate Banking Committee -- want Cox to provide additional information on the possible implications of a proposed bill that would boost taxes on private-equity shops planning to issue shares to the public.
The tax is so-named because it comes as the Blackstone Group is set to price its $4.75 billion initial public offering Thursday.
The Senate Finance Committee has placed a bull's-eye on Blackstone CEO Stephen Schwarzman and his private-equity clan. The bill would see the private-equity juggernaut be taxed at a higher rate of more than 35% -- compared to the 17% rate that hedge fund
and Blackstone currently enjoy via their partnership structures.
"Specifically, we ask you to examine its likely impact on the nation's capital markets, including the potential effects on investor protection, capital formation and other relevant issues," states the letter to Cox, which was obtained by
A call to Sen. Shelby's office was directed to a banking committee representative who did not immediately return a call. A call to Sen. Dodd was fielded by a media representative who said a press release was imminent.
"This legislation has raised many questions from interested parties about its impact on the capital markets if it were to be enacted into law," the letter states. "Pursuant to our oversight of these markets, we are seeking more information about such impact."
An SEC spokesman declined to comment on the Shelby/Dodd letter.