Not so fast, private equity
U.S. Capitol Building
TEXT OF STORY
SCOTT JAGOW: Private equity firm Blackstone Group will start selling stock in about 10 days. Wall Street is giddy about this IPO; Congress doesn't share the love. That's because private equity groups don't share the same tax burden as public companies. So leaders of the Senate Finance Committee have proposed a new bill. Steve Henn reports from Washington.
STEVE HENN: The bill would force private equity firms like Blackstone to pay corporate income taxes.
Right now Blackstone's profits are taxed as capitol gains at 15 percent. If this bill becomes law, the company's tax rate could more than double after it goes public.
The bill's sponsors believe if Blackstone manages to avoid corporate taxes other firms will follow suit and America's tax base could erode. Len Burman follows federal tax policy at the Urban Institute.
Len Burman: The challenge for Congress is to tax income as comparably as possible. So you don't have one company taxed under one set of rules and another taxed under another set of rules.
If the bill is signed into law it would take effect this Thursday, but because Blackstone's already filed to go public, the company wouldn't be subject to its new tax rate for five years.
In Washington, I'm Steve Henn for Marketplace.