Blackstone says Senate bill would significantly devalue firm(3)

The Blackstone Group would see its $25 billion (€18.5 billion) market value sink by as much as $10.5 billion should Congress pass a bill that would raise taxes on publicly traded financial services partnerships, Bloomberg reported.

The private equity firm said the Baucus-Grassley bill – authored by Senate Finance Committee chair Max Baucus, a Democrat from Montana, and Iowa Senator Charles Grassley, the committee’s ranking Republican – would cause Blackstone’s annual taxes to triple, representing an increase of $525 million.

Blackstone also said the bill would effectively decrease the government’s tax revenue because it would discourage firms from listing on public markets.

Kerry

The comments were made in a letter to Congress, which was reportedly requested by Senator John Kerry, a Democrat from Massachusetts and member of the Senate Finance Committee. In previous committee hearings on the matter, Kerry’s comments have indicated hesitancy to endorse the bill.

Blackstone is spending handsomely on lobbyists to combat the proposed legislation, as well as a House bill that proposes increasing the tax on carried interest. In the first six month of the year, the firm spent $3.74 million employing 13 tax lobbyists, as compared with the $120,000 it spent on seven lobbyists in the first six months of 2006

Blackstone did not immediately return a request for comment.