Carried Interest Tax Proposal Could Hit a Quarter of Buyouts

House Republicans’ chief tax writer has investment managers in his crosshairs.

Representative Kevin Brady, the House Ways and Means Committee chairman, moved this week to include a provision in his party’s tax bill that would raise the bar on which profits are taxed preferentially. If Brady gets his way, deal profits shared with investment managers would be treated as long-term capital gains -- and hence taxed at a lower rate than ordinary income or short-term gains -- only if they’re earned on investments held for at least three years, rather than one year now.