Washington Update

Chairman of the House Ways and Means Committee Dave Camp (R-MI) stirred the pot a few weeks ago when he introduced his “discussion draft” for comprehensive tax reform in late February. In this plan, both carried interest and publicly traded partnerships are subjected to large tax hikes. Full interest deductibility remained largely intact, with the exception of some thin capitalization rules for multinationals.

The PEGCC responded strongly to Chairman Camp’s proposals surrounding carried interest and publicly traded partnerships. In its statement, the PEGCC argued that, “Chairman Camp’s proposal penalizes long-term capital investment,” and hoped that, “policymakers will utilize the opportunity to reform the tax code as a way to encourage, not undermine, capital investment in America.”

The introduction of Chairman Camp’s proposal does not change the calculus that tax reform, comprehensive or corporate, is unlikely to happen this year. Even so, the PEGCC continues to educate Members of Congress about the value of private equity for the U.S. economy and make our case on carried interest and publicly traded partnerships. While the “discussion draft” changed the environment surrounding many of our tax issues, the overall atmosphere in Washington has not altered. We remain in a historically partisan environment, and the list of major legislation with a chance of passage this year is unusually short.

Yesterday, Chairman Camp announced he will not seek reelection this year. It is rumored that Rep. Paul Ryan (R-WI) will look to succeed Chairman Camp as the new Chairman of the House Ways and Means Committee in the next Congress.