Obama piggybacks Texas fundraiser onto Bush library dedication
Ms. Aberly is married to hedge-fund manager Larry Lebowitz and has donated time and money to groups such as Planned Parenthood, serving as a board chairwoman of its North Texas chapter. She raised more than $1 million for Mr. Obama’s re-election and raised approximately $400,000 for his 2008 election.
Mr. Obama is relying on Ms. Aberly despite his past criticism of hedge funds and the tax benefits they enjoy. In an interview with CBS News earlier this year before the Super Bowl, he singled out “carried interest,” which refers to the reduced tax rate hedge funds and private equity firms pay on a substantial part of their income as one such benefit.
In the interview. Mr. Obama said the United States could reduce the deficit in a balanced way. He said he doesn’t want to increase tax rates but pushed for more spending cuts, as well as ending deductions that are not available to all Americans, singling out “carried interest” as a tax break ripe for targeting.
“We just want to make sure that the whole system is fair, that it’s transparent and that we’re reducing our deficit in a way that doesn’t hamper growth,” he said.
Mr. Obama’s budget, released last week, would end the “carried interest” tax break. The tax code right now allows the general partner of a hedge fund to treat income gained from the profits as investment income subject to the capital gains tax rate, which tops out at 20 percent, rather than ordinary income that can be taxed at a top rate of 39.6 percent.
Relying on this reduced rate, hedge fund and private equity managers take cuts from their investors’ profits instead of charging traditional management fees, reducing the amount they need to pay in taxes without reducing their income.
Republican presidential candidate Mitt Romney used the tax break to pay a lower tax rate on a good portion of his nearly $13.7 million in income in 2011.
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