Hedge funds brace for looming tax changes
By Lawrence Delevingne
Fri May 21, 2010
In the past week, Congress has once again proposed a measure
that would remove the exemption that allows hedge funds and
other asset managers to pay capital gains taxes on carried
interest. The measure looks likelier to pass this time than in
any previous attempt, but hedge funds aren't panicking, at
least openly, and some say they view the higher taxes as a
"From an ethical point of view, I'm not sure why hedge fund
managers should pay less tax than people who have real jobs and
work hard," said Steve Shapiro, president of Intrepid Capital
Management. "I'd certainly be the last person to tell you if
they tax carried interest it's going to destroy the free
A proposal likely to pass Congress would effectively raise the
tax rate to 34.7% on the performance fees hedge funds charge
their clients for gains on investments held for...
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