Rubin: Boost hedge managers' taxes

Hedge fund managers and private equity partners should pay more than double their current tax rate, said Robert E. Rubin, former Treasury secretary, according to published reports. "It seems to me what is happening is people are performing a service, managing peoples’ money in a private equity form, and fees for that service would ordinarily be thought of as ordinary income,” Mr. Rubin said, speaking yesterday at a tax reform conference arranged by the Hamilton Project in Washington. He was answering a question as to whether the 20% fee on profits managers earn should be taxed at the 15% capital gains rate or raised to the income tax rate of 35%, the Times reported. Mr. Rubin, now Citigroup’s chairman of the executive committee, said he was expressing his own views and not those of his employer. The issue has caught Congress’s eye, as it searches for revenue sources. Several months ago, staffers with the Senate Finance Committee began examining taxes on the 20% fees, plus other tax issues in the hedge fund and private equity sphere, Bloomberg said.