Lobbying Intensifies Against Carried Interest Tax

WASHINGTON, DC-At least 14 associations that represent the interests of the housing and real estate communities have sent an open letter to Congress urging it to oppose a proposal to tax carried interests in partnerships as ordinary income. The lobbying efforts against the proposal has taken on an added urgency now that the House Ways and Means Committee has introduced a comprehensive tax plan that would among other measures more than double to 35% the tax rate on carried interest.

While the proposal had been floating around Capitol Hill for a while, industry advocates had been relatively sanguine about its chances of passage–until that is, the proposal got linked to abolition of the AMT. The real estate associations acknowledge that tax relief from the AMT–which snares a growing number of middle class families every year–is an important goal. However, the associations maintain, AMT relief should be decoupled from this proposal, which could have devastating consequences to the economy.

“We support the extension of the AMT relief and other important expiring tax provisions–particularly those affecting real estate,” the letter said. “We also appreciate the goal of improving fairness in the Tax Code and reducing the income disparity in our country. However, we don’t believe offsetting the cost of this relief with the carried interest tax is the right solution.”