New York (HedgeCo.net)- The U.S. House of represntatives yesterday voted to more than double a tax on income earned by executives of private equity and venture capital firms including hedge funds. The bill treats compensation received by executives at private equity firms, hedge funds and venture capital firms as ordinary income and taxes it at a 35% rate.

House Republicans said the tax would discourage investors, but this is the second time House Democrats have won over their objections. A new feature of the bill would add a 30% withholding tax on foreign banks that fail to report on U.S. clients to tax authorities. The bill was approved by a 241-to-181 vote.

President Barack Obama proposed raising taxes on fund executives at buyout firms, hedge funds, venture capital firms and other partnerships including real estate and oil and gas investments at a budget meeting earlier this year. The total tax hike would raise $23 billion over the next ten years.

Alex Akesson
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