U.S. Senate Finance Committee chairman, Max Baucus, eliminated the carried interest provision from his end-of-year compromise tax package, which was agreed to by President Obama, this past week.
Although Democrats currently controlling the U.S. House of Representatives continue to oppose the package, if it does pass (as expected), the year-end tax extenders bill will not increase US federal income tax rates on carried interest.
Further, a U.S. carried interest tax change is unlikely to be put forth during 2011 and 2012 when the Republicans take over control of the House. The continuing (though lessening) desire to require any spending programs to be paid for with tax increases rather than spending cuts and the looming U.S. deficit, however, mean that carried interest will not be "off the table" permanently.
