NMHC has rolled out an aggressive lobbying campaign to oppose proposed changes in the taxation of carried interest (i.e., “the promote”) after President Obama’s budget blueprint proposed a 160 percent tax increase on carried interest beginning in 2011—increasing the tax from the current capital gains rate of 15 percent to ordinary income tax rates, which are proposed to increase to 39.6 percent.
In recent weeks we have met with several lawmakers, targeting both leadership and rank-and-file members of the House and Senate, explaining that not only is such a tax law change inappropriate, but it would also have numerous unintended consequences, including exacerbating the nation’s affordable housing shortage.
The proposal passed the House of Representatives (but not the Senate) on a largely party-line vote in both 2007 and 2008. In an encouraging sign, both Chairman Max Baucus (D-MT) and Ranking Member Charles Grassley (R-IA) of the Senate Finance Committee recently expressed their belief that the current economic climate will make passage of the proposal in 2009 less likely. The Obama Administration, however, continues to express its plans to push for swift enactment of the proposal.