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.2686 - Ending Wall Street Tax Giveaway Act (118th Congress 2023-2024)
Prospective Sponsor: Rep. Donald Beyer (VA)

• I oppose reforming private equity fund taxation policy, and wish to donate resources to the campaign committee of Speaker Mike Johnson (LA).
  
• I support modifying the tax treatment of carried interest, which is compensation that is typically received by a partner of a private equity or hedge 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) by:
  
  1.) Setting forth a special rule for the inclusion in gross income of partnership interests transferred in connection with the performance of services.
  
  2.) Treating as ordinary income the net capital gain with respect to an investment services partnership interest except to the extent such gain is attributable to a partner's qualified capital interest.
  
  3.) Exempting income from investment services partnership interests from treatment as qualifying income of a publicly traded partnership
  
  4.) Exempting certain family partnerships from the application of this bill.
  
  5.) Increasing the penalty for underpayments of tax resulting from failure to treat income from an investment services partnership interest as ordinary income.
  
  6.) Including income and loss from an investment services partnership interest for purposes of determining net earnings from self-employment and applicable self-employment taxes.
  
  And wish to donate resources to the campaign committee of Rep. Donald Beyer (VA) and/or to an advocate group currently working with this issue.