Democracy Rules

Private equity funds are private investment vehicles used to pool investment capital that is usually provided by a small group of limited partners. Critics claim the managers of these investment pools buy targeted companies, cut some jobs and offshore others, pile on debt and walk away with huge profits that are hardly taxed. Often, employees who contributed to pension funds over decades of employment find themselves in poverty after leveraged-buyout firms walk away from pension liabilities. Supporters claim these funds create jobs and value which benefit many pension funds, university endowments and other investment pools that serve ordinary people. They say that some equity funds make long-term investments in the firms they buy to produce better, more efficient companies.

Equity funds are subject to favorable regulatory treatment in most jurisdictions from which they are managed and this allows them to minimize the tax burden on their investors and managers. The income from private equity funds is taxed as a capital gain rather than as normal income. The maximum tax rate for capital gains is 20%, compared to the 37% marginal income tax rate that people pay. Critics claim private equity managers are using a loophole to avoid paying their fair taxes on what is actually a salary, and this is costing our Treasury many millions of dollars each year.

Proposed Legislation: Reintroduction of H.R.5648 - Stop Wall Street Looting Act (117th Congress 2021-2022)
Prospective Sponsor: Rep. Mark Pocan (WI)

I oppose reforming private equity fund taxation policy, and wish to donate resources to the campaign committee of Speaker Kevin McCarthy (CA).
I support revising provisions related to the regulation of private equity funds by: 1.) Increasing financial and legal liability for these funds in the event of certain violations of law. 2.) Giving employee compensation higher priority in bankruptcies, and prohibiting the payment of dividends for two years from an acquired asset firm to a private equity fund. 3.) Modifying the tax treatment of carried interest—compensation that is typically received by a partner of a private equity fund and is based on a share of the fund's profits. (Under current law, carried interest is taxed as investment income rather than at ordinary income tax rates.) 4.) Treating as ordinary income the net capital gain with respect to a private equity fund. And wish to donate resources to the campaign committee of Rep. Mark Pocan (WI) and/or to an advocate group currently working with this issue.

Winning Option »» I support revising provisions related to the regulation of private equity funds by: 1.) Increasing financial and legal liability for these funds in the event of certain violations of law. 2.) Giving employee compensation higher priority in bankruptcies, and prohibiting the payment of dividends for two years from an acquired asset firm to a private equity fund. 3.) Modifying the tax treatment of carried interest—compensation that is typically received by a partner of a private equity fund and is based on a share of the fund's profits. (Under current law, carried interest is taxed as investment income rather than at ordinary income tax rates.) 4.) Treating as ordinary income the net capital gain with respect to a private equity fund. And wish to donate resources to the campaign committee of Rep. Mark Pocan (WI) and/or to an advocate group currently working with this issue.