Promote non-discriminatory tax policy for investment firms at the federal and state levels
MFA supports efforts to create a fair, simple, and growth- oriented tax code that promotes investment activity in the U.S., including from tax exempt investors like pensions and endowments, and non-U.S. investors.
In prior Congresses, legislation regarding the taxation of “enterprise value” has been introduced to change the tax treatment on a sale of a business from a capital gains rate to the ordinary income rate. This change, however, would only apply when the stake in the business belongs to an investment adviser. MFA remains actively opposed to discriminatory tax proposals that would unfairly punish investment advisors who build businesses. Several proposals introduced in previous Congresses have included a tax proposal that would tax a partner’s carried interest in a partnership (or LLC) as ordinary income.
MFA also is opposed to the discriminatory approach to proposed changes in carried interest to the extent that measures introduced to date have addressed so-called concerns regarding carried interest for financial firms while leaving in place the existing regime for similarly situated non-financial entities.
MFA urges policy makers to maintain the current tax treatment of the investment returns of advisers to private pools of capital and continues to encourage policymakers to support tax policies that do not create significant collateral effects.