House Democrats would end carried interest tax break

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House Democrats introduced a bill on Friday afternoon that would eliminate the tax break on carried interest, or incentive income, that hedge funds and private equity currently enjoy.

House Ways and Means Committee Chairman Charles Rangel of New York, joined by Rep. Sander Levin of Michigan and Rep. Barney Frank of Massachusetts, and other members of the tax-writing committee, introduced the bill.

Under the bill, managers of investment partnerships who receive carried interest or incentive income as compensation would pay regular income tax rates rather than capital gain rates on that compensation. The capital gains rate would continue