A pro-private equity blog, “From Wall Street to Main Street”, has been launched by the office of Thomas Reynolds, a Republican Congressman from New York who believes raising taxes on carried interest would be detrimental to numerous industries and the US economy.
“We need to frame the issue before it’s framed by the opponents. Part of any modern legislative issue is about framing the issue,” Reynolds told PrivateEquityOnline.
From Wall Street to Main Street mainly consists of links to news stories pertaining to private equity and carried interest. It is meant to help educate interested stakeholders and Reynolds’ fellow congressmen, including those who sit with him on the House Ways and Means Committee, as well as counterbalance information being disseminated from groups such as the Service Employees International Union, Reynolds said.
“Many people are trying to say Blackstone is the reason [for increased congressional scrutiny of private equity taxation], that’s really the Trojan Horse for the carried interest issue,” he said, noting that he believes most congressmen who have become interested in the taxation of publicly traded partnerships and carried interest have done so because they hope to capture additional tax revenue.
“It seemed like a month ago that only three of my Republican colleagues” had opinions and were well-educated on private equity, Reynolds said. That has changed, he said.
Increasing the tax on carry and taxing publicly traded partnerships as corporations – as two separate bills have proposed – would result in “sizeable revenue to the Treasury but I think it would have a devastating impact to industry” and capital formation, Reynolds said.
“What’s the consequence from Wall Street to Main Street?” Reynolds asked. The issues pertaining to private equity that are being examined by Congress, he said, “penetrate into real estate, oil and gas investment, as well as endowments of universities and pension systems”.
The House Ways and Means Committee is due to hold hearings on private equity later this month.