MEDIA ADVISORY, Thursday, June 22, 2007
CONTACT: Yoni Cohen, Stark (202) 225-3202

WASHINGTON, D.C. -- Representative Pete Stark (CA-13) today joined Representatives Sander Levin (D-MI), Charles Rangel (D-NY), Barney Frank (D-MI), Jim McDermott (D-WA), John Lewis (D-GA), Richard Neal (D-MA), Earl Pomeroy (D-ND), Stephanie Tubbs Jones (D-OH), John Larson (D-CT), Earl Blumenauer (D-OR), Ron Kind (D-WI) and Bill Pascrell (D-NJ) in introducing legislation that would ensure that "carried interest,” the share of investment funds’ profits which fund managers claim as compensation for their services, would be taxed at the appropriate ordinary income tax rate. As a result of funds’ partnership structures, managers of private investment partnerships are currently able to have compensation for their services taxed at the much lower capital gains tax rate.

“Wealthy fund managers don’t deserve special treatment and special tax breaks,” said Stark. “Much like teachers, nurses and homebuilders, they’re doing their jobs. Fund managers’ income should be taxed at the same rate as other working Americans. Democratic legislation would provide for tax fairness by requiring their ‘carried interest’ to be taxed as regular income instead of capital gains.”

The capital gains rate will continue to apply to the extent that the managers' income represents a reasonable return on capital they have actually invested in the partnership.

A fact sheet describing the legislation is available here.