June 26, 2007

Grassley Watch

Senators Baucus (D) and Grassley (R)

It never fails, whenever the free market is poised to succeed and innovate further, there is always an effort to tax or regulate it from reaching its true potential. The most recent example: efforts to impose new punitive taxes on
publicly traded partnerships.
In view of several pending and potential Initial Public Offerings (IPOs) by private equity firms seeking to join the public markets, U.S. Senators Max Baucus (D-MT)and Charles Grassley (R-IA) unveiled punitive legislation in S.1624 late last week to actually RAISE taxes on ALL existing and new publicly traded partnerships.
Like bad tax policy before it, this legislation was offered without the benefit of normal Congressional or Joint Tax Committee hearings or any analysis from the U.S.
Treasury or the Internal Revenue Service. The free market community is united against any new tax increases and will oppose this bill vigorously. Not only is this legislation a major tax increase, it will actually depress tax revenues as other partnerships will choose to stay private or reincorporate abroad – neither of which is good for the economy, the government or investors. This legislation will more than double the tax-rate for ALL current publicly traded partnerships – the vast majority of which are not even private equity-based partnerships.

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