When I was a freelance writer, my liberal friends mocked me mercilessly for complaining about my tax burden. They thought it was a hoot that a struggling scribbler fretted about taxes. They were wrong. I was poor, but not too poor to pay significant taxes.
A punitive new tax has been proposed by Senators Max Baucus, a Democrat, and Charles Grassley,a Republican, and my guess is that my liberal friends are going to mock me for caring about this one, too. You see, it is a tax on publicly traded partnerships. Think that sounds as if it will affect only corporate moguls? Like my mocking liberal pals, you couldn’t be more wrong.
Here is what the American Conservative Union ” target=_blank>says about this tax:
“Past criticism of this rapidly growing market has rested largely on the fact that it is limited to but a small pool of institutional and wealthy individual investors, and that because they are private there is a lack of transparency relative to their financial activities. The American Conservative Union would ask what better way to address both concerns and usher in greater economic growth than having them become publicly traded? That way, investors big and small could benefit from the high returns being realized by private equity firms, and such partnerships, now private, would be subject to full public oversight.
“The recently introduced Baucus-Grassley bill to increase taxes on publicly traded partnerships would serve as a disincentive to bring about either. Instead it would tax innovation and further.”
Even those of us who invest in a very small way count on a vibrant economy. In addition to slowing the economy, this tax, if it becomes law, will have a debilitating effect on pending IPOs (initial public offerings), preventing companies from going public and letting us small fry get a piece of the action.