Thursday, January 7, 2010

'Way Too Rich'

The Wall Street Journal reports this morning that "Congress Has Hedge Funds, Buyout Firms in Tax Sights" — that the "carried interest" tax deduction that helps lessen a hedge fund manager's tax bite is back on the radar screen in a big way. The article notes how Congress tried this before in 2007 but backed off as the financial crisis deepened.

I remember that well. I was in the room back in October 2007 when Congressman Barney Frank was an early morning keynote speaker at the annual conference of the National Association of Corporate Directors. He got a big chuckle from the crowd when he told how the poohbahs from the PE firms had been descending on him to try to deflect the government's interest in changing their tax structure.

His message to the big-wheel financiers: "You guys are way too rich to be feeling so sorry for yourselves."

They did get a reprieve, but it looks like the PE guys better buck up — the curtain may be coming down on the feeling-sorry-for-themselves act.