Latest Obama Administration Proposal to Tax Carried Interest as Ordinary Income
On September 12, 2011, the Obama Administration submitted legislation to Congress in the American Jobs Act that would tax income from carried interests at ordinary rates. The Administration’s proposal on carried interest is similar to proposed legislation previously passed by the House of Representatives and considered by the Senate, although, as described below, there are several differences from those earlier proposals. While enactment of carried interest legislation seems unlikely this year, the proposal presumably reflects the Administration’s intended course on carried interest and follows prior statements by the Administration in support of the earlier proposals.