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GOP legislator wants to boost tax on carried interest

Michigan Congressman Dave Camp on Wednesday offered a tax proposal he said would “clean up” the carried interest provision that lets private equity partners pay lower taxes on large portions of their incomes. Camp’s plan drew little support from other Republicans.

SunPic

Ruling Against Sun Capital Could Have Wider Private Equity Impact

In a court case that could add a new risk factor to some deals, the First Circuit Court of Appeals last month ruled in favor of the New England Teamsters and Trucking Industry Pension Fund, which argued that two investment funds managed by Sun Capital Partners were liable for $4.5 million in pension liabilities for Scott Brass Inc., a Sun Capital portfolio company that want bankrupt in 2008, according to Buyouts, peHUB’s sister magazine.

Obama Pitches Changes to Carried Interest; PEGCC Rebuts “Buffett Rule”

President Obama’s plans to change the carried interest tax is getting more attention today.

Obama on Monday pitched a plan, which uses tax increases and entitlement cuts, to slash the federal deficit by $3 trillion, according to the New York Times. In the PE world, it’s the President’s introduction of the so-called “Buffett Rule” — which aims to change carried interest — that is getting tons of play.

Obama called to overhaul the tax code, Bloomberg News reported Monday. His plan aims to eliminate the “special lower rates for the wealthy,” which were “meant to be temporary,” the story says.

PE-Backed M&A Drops 26% in Q1, Firms Putting in 31% Equity In Deals

What’s a PE index?

According to the Private Equity Growth Capital Council, the index is designed to provide “an accurate snapshot of the state of the private equity market at any given point in time.” The index, PEGCC said, reached its highest level at the end of first quarter since the height of the recession. What is that? The index settled at 119.2, which is way above its 10-year moving average of 100, but still below the high reached in Q4 2006 of 154.9.

So things are good, I guess. Much more relevant–for me–is the data PEGCC kinda put together. The dollar volume of PE-backed M&A fell by 25.7% to $51.7 billion in first quarter compared to $69.6 billion in fourth quarter 2010, PEGCC said citing Thomson Reuters data. The reason for the decline? The PEGCC said it was the lack of “large and mega buyout activity” this year.

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