Private-equity firms dodge tax bullet

The fierce battle over proposals to increase the private-equity tax is stalling in the Senate, according to The Washington Post. In recent weeks, Senate majority leader Harry M. Reid, D-Nev., has let private-equity firms know that the Senate was not likely to hear a proposal on raising the tax this year, according to The Washington Post. If the tax is not raised this year, the chances are not strong for passage in 2008, as Congress tends to shy away from tax hikes in election years, according to the report. Private-equity firms have been lobbying ferociously against the proposed tax hike, arguing that the higher tax would slow economic growth, according to the report. But the “Blackstone bill,” which would raise taxes on private-equity firms that go public, is already in the Senate and will most likely pass, The New York Times said today. Meanwhile, the issue of private-equity taxation has jumped the pond. Britain’s chancellor Alistair Darling is weighing a tax-hike proposal, published reports said. Mr. Darling is set to pitch the proposal in Parliament today, according to The Guardian. He is expected to cut back economic growth predictions for next year, following the subprime-mortgage turmoil, necessitating some revenue from added private-equity taxes, The Guardian said.