By Hazel Bradford, Crain News Service
WASHINGTON (Feb. 27, 2014) — U.S. House Ways and Means Chairman Dave Camp, R-Mich., on Feb. 26 unveiled a draft proposal for comprehensive tax reform that calls for eliminating private equity firms' carried interest tax rate and trims tax advantages of retirement savings for higher-income workers.
Mr. Camp's proposal is aimed at simplifying and lowering individual and corporate income tax rates, but it comes with new surcharges on wealthy individuals and corporations.
His idea to eliminate carried interest and have private equity and venture capital firms pay regular tax rates would mean a 40-percent tax increase, said Steve Judge, president and CEO of the Private Equity Growth Capital Council. "Chairman Camp's proposal penalizes long-term capital investment," Mr. Judge said in a statement.
Mr. Camp would also like to shift more high-income retirement savers into Roth IRAs, which produce more tax revenue upfront. His proposal calls for a 10-percent tax on all direct contributions (DC) contributions made by people in the 35 percent bracket and another tax later when participants take distributions from their DC plans.
"We understand that retirement tax incentives are a tempting target," said Scott Macey, president and CEO of the ERISA Industry Committee, but they "are not what we would consider 'closing tax loopholes.'"
Mr. Macey said the idea of forcing all plan sponsors to offer Roth-type arrangements would add compliance burdens that could decrease retirement savings.
The prospects for congressional action on the sweeping tax overhaul are not high. "Key policymakers from both parties have already made clear that the discussion around this draft proposal will be brief," Mr. Judge said.
This report appeared on pionline.com, the website of Pensions & Investments magazine, a Chicago-based sister publication of Tire Business.
When is the last time you attended one of the national tire industry trade shows, such as SEMA, ITEC or the North American Tire & Retread Expo?
|I try and take in at least one show a year.||
|I usually attend one every few years.||
|There are so many tire maker and distributor meetings each year, I don’t see a need to attend one of the national shows.||
|I don’t find value in these shows and haven’t been to one in years.||
|I’d like to but I am too busy||