Tucked into the Tax Extenders Act of 2009 (H.R. 4213) was a provision targeted at partnership interests held by partners providing services. H.R. 4213 flew through the legislative process of the House of Representatives. It was introduced on December 7, 2009 and passed by the House on December 9, mostly along party lines. The Carried Interest Tax is one of several dozen changes to the tax code included in that bill.
But will the bill pass in the Senate? Let’s hear from Sen. Debbie Stabenow (D-Michigan):
- “I don’t think it’s going to be part of the Senate bill.”
- “While members of the committee have brought it up, it won’t be part of any bill we pass.”
- “You never know, but I seriously doubt it.”
The US Senate has not introduced anything similar to the Tax Extenders Act. With a Democratic controlled Senate I assumed that passage was inevitable.
But it appear that the divide between the House and the Senate on private equity and private funds appears to be growing. Both bodies keep talking about clamping down on hedge funds, but neither seems to know what one is and is not bothering to define it in the legislation.