And as we reported, private-equity firms enjoy a low tax rate on most of their profits. That'd drawn the attention of the tax-writing committees on Capitol Hill.
Now, as NPR's Jack Speer reports, Congress may up the taxes for private-equity groups like Blackstone.
JACK SPEER: The chairman of the Senate Finance Committee, Democrat Max Baucus, opened yesterday's hearing with a quote from President Theodore Roosevelt.
Senator MAX BAUCUS (Democrat, Montana): The man of great wealth owes a peculiar obligation to the state because he derives special advantages from the existence of government.
SPEER: A proposed Senate bill would more than double the tax rate on private-equity firms that go public from the current 15 percent rate to 35 percent. A recently introduced House bill would apply to all private-equity and hedge funds. The magazine publisher Steve Forbes said recently these proposals might be driven by envy over the sky-high salaries of some of the executives. That drew a sharp response from the ranking Republican on the committee, Senator Charles Grassley.
Senator CHARLES GRASSLEY (Republican, Iowa): I direct Mr. Forbes and other critics to cool it. This is a bipartisan finance committee process that has not reached conclusions and hence that's what this hearing is all about.
SPEER: The Bush administration used the hearing to warn that going after private-equity could hurt entrepreneurship and the U.S. economy.
Jack Speer, NPR News, Washington.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.