Overview

On May 28, the House of Representatives passed a Carried Interest tax increase late last month to pay for a tax extenders bill (H.R. 4123). 

On June 8, the Senate announced a so-called compromise in an effort to secure the 60 votes needed to pass the tax extenders measure.  The Senate version, while slightly better than the House version, would still be potentially devestating to real estate partnerships.

Under both the House and Senate bills, effective January 1, 2011, 50% of Carried Interest will be taxed at ordinary income tax rates and 50% will be taxed at capital gains tax rates.  The Senate bill would enact a 65%-35% split after January 1, 2013.  (The House bill provided a 75%-25% split).  The Senate draft also allows assets held for at least seven years to be taxed at a 55%-45% split.  Both bills would apply to all existing and new partnerships and would subject Carried Interest to the self-employment tax.

We need your help to educate Congress about the chilling effect this large tax increase would have on the commercial real estate industry and the damage it would do to local economic development/revitalization efforts throughout the country.  

In recognition of the serious harm this legislation could have, both the U.S. Conference of Mayors and the National Association of Counties recently adopted official positions opposing it and urging Congress and the Administration to maintain current law.

Please take a few minutes to call the offices of your Senators to tell them that the Carried Interest tax increase will exacerbate the affordable housing shortage and kill the prospects for job growth in the real estate sector.

And then take a few minutes more to forward this to your key employees and colleagues and ask them to make calls today.  Since time is of the essence, we are asking members to make calls instead of sending letters.

Take Action - Call Your Elected Officials.

1. Find Your Representative/Senators.  See below or here for a list of targeted Senators.  See here for a phone list of all Senators by state.
   
   
2. Make the Call.  

Here is a sample conversation:

Hi, how are you, my name is (YOUR NAME) and I'm with (YOUR COMPANY) in (YOUR TOWN), (YOUR STATE).  I manage/operate/own (NUMBER) apartment building(s) that employ (NUMBER OF PEOPLE).

I'm calling to ask the Senator/Representative to oppose the proposal to increase the tax on Carried Interest by 133%.

This proposal will have a devastating impact on our affordable housing supply when the nation already has a shortage of 3 million affordable housing units.  It will also kill jobs and depress income for cities and counties. 

Can you please let (Senator/Representative) know that the Carried Interest tax increase is bad for our state's housing supply and our economy?

If you get voice mail, leave a message with your name and contact information and your position opposing the Carried Interest tax increase as "bad for housing, bad for job creation and bad for the economy". 

Targeted Senator List

• Mark Pryor (AR)  DC office 202-224-2353  Little Rock 501-324-6336
• Kent Conrad (ND) DC office 202-224-2043 Bismarck 701-258-4648
• Diane Feinstein  (CA)  DC office 202-224-3841  Los Angeles  310-914-7300
• Barbara Boxer (CA)  DC office 202-224-3553  Sacramento 916-448-2787
• Michael Bennet (CO)  DC office 202-224-5852  Denver 303-455-7600
• Charles Grassley (IA)  DC office 202-224-3744  Des Moines 515-288-1145
• Mary Landrieu (LA)  DC office 202-224-5824  Baton Rouge 225-389-0395
• Olympia Snowe (ME)  DC office 202-224-5344  Portland 207-874-0883
• Susan Collins (ME)  DC office 202-224-2523  Augusta 207-622-8414
• Benjamin Cardin (MD)  DC office 202-224-4524  Baltimore 410-962-4436   
• Claire McCaskill (MO)  DC office 202-224-6154  St. Louis 314-367-1364
• Ben Nelson (NE) DC office 202-224-6551  Omaha 402-391-3411
• Kay Hagan (NC)  DC office 202-224-6342  Raleigh 919-856-4630
• George Voinovich (OH)  DC office 202-224-3353  Cleveland 216-522-7095
• Jeff Merkley (OR)  DC office 224-3753  Portland 503-326-3386
• Jim Webb (VA)  DC office 202-224-4024  Arlington 703-807-0581
• Mark Warner (VA)  DC office 202-224-2023  Norfolk 757-441-3079
• Jeff Bingaman (NM) DC office 202-224-5521 Albuquerque 505-346-6791
• John Kerry (MA) DC office 202-224-2742 Boston 617-565-8519
• Blanche Lincoln (AR) DC office 202-224-4843 Little Rock 501-375-2993
• Ron Wyden (OR) DC office 202-224-5244 Portland 503-326-7525
• Charles Schumer (NY) DC office 202-224-6542 Albany 518-431-4070
• Debbie Stabenow (MI) DC office 202-224-4822 Detroit 313-961-4330
• Maria Cantwell (WA) DC office 202-224-3441 Seattle 206-220-6400
• Bill Nelson (FL) DC office 202-224-5274 Orlando 407-872-7161
• Robert Menendez (NJ) DC office 202-224-4744 Newark 973-645-3030
• Thomas Carper (DE) DC office 202-224-2441 Wilmington 302-573-6291

We have also provided a sample letter, although calls are preferable at this point.  If you send a letter, it is important to let your Congressional representatives know about your firm’s specific connection to their Congressional district and/or state, so please personalize your letters by putting them on company letterhead.  Please send a copy of your letter to NMHC’s Michele Cherry by fax (202/775-0112) or e-mail (mcherry@nmhc.org).

If you have any questions, please feel free to contact Jim Arbury, NMHC's Vice President of Tax, at jarbury@nmhc.org or 202/974-2321.