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The Rangel Tax Bill

Charles Rangel, House Ways and Means Committee Chairman, has introduced a new tax overhaul bill that is causing a lot of commotion. At the most basic level, the proposal raises taxes on high-income families and some businesses, and cuts bills for the lower classes. It also lowers the corporate rate.

The debate has become highly politicized and should become a major issue in the presidential race. A classic Democrat/Republican struggle, we’ll have to see how the candidates react to such an extreme bill. But it also has specific implications for hedge funds, buyout and venture-capital firms. Bloomberg News reports, “The measure would raise levies on the compensation that executives at buyout and venture-capital firms, as well as at real estate and oil and gas partnerships, receive for managing investments. It would also require hedge fund managers to pay tax on income they defer in offshore accounts.”

On an individual level, the bill “…contains a permanent repeal of the minimum tax, a tax rate surcharge on wealthy households and a lower corporate rate. It also includes the repeal of business tax credits and deductions while increasing exemptions and credits for lower- and middle-income families.”

Of course, the bill hasn’t been passed,but that doesn’t stop us from asking—what do we think?

Posted by David Flax, CPA on November 27, 2007 • Email to a Friend

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