Real Estate Industry Opposed to Equity Tax Plan

The Washington Post reports:

The real estate industry yesterday added its voice to the growing number of commercial interests opposed to a congressional proposal that would increase the tax rate on income earned by the managing partners of investment firms.

In testimony prepared for the House Ways and Means Committee, Adam Ifshin, president of DLC Management, a real estate development firm, said that companies like his would not be able to expand as readily -- and might never have come to exist at all -- if the tax rate were higher than it is now.

Experts on both sides of the carried interest issue testified before packed audiencesyesterday at hearings held by the Ways and Means Committee and the Senate Finance Committee.

Some leading Democrats in the House have proposed to more than double the tax rate on carried interest to the 35 percent range from 15 percent, the special low rate for long-term capital gains.

Ways and Means Committee Chairman Charles B. Rangel (D-N.Y.) said he was considering using the revenue-raising proposal, perhaps along with other tax-simplification measures, to pay for an expensive reduction in the alternative minimum tax. The AMT threatens to raise taxes on 23 million households, some of them middle-income households, an outcome that Rangel said was never intended when the AMT was enacted.

A group that had come out against the tax increase, the National Conference on Public Employee Retirement Systems, said it was no longer taking a position on the measure. The group said in a letter that "some of its members" were concerned but the change, "but a majority of our members do not share that opinion."

You'll want to read this one.