First Vote to Extend Capital Gains Rate Fails During its deliberations a couple of weeks ago on the budget resolution, the House Budget Committee "shot down a proposed amendment to extend the 15 percent capital gains tax rate [in] the first vote on the extension of these critical tax cuts," according to the American Shareholders Association blog, Shareholders' Corner. The Committee vote was party-line. An extension of the rate would not have been binding, but the vote offers a glimpse at the rate's future under Democratic leadership. 20/20 foresight? Pro & Con: Taxing Private Equity Fees as Cap Gains Senate Finance Committee ranking member Charles Grassley (R-IA) is prodding a big Wall Street sacred cow. Private equity investors' management fees are legally taxed at capital gains rather than regular income rates (roughly a 50 percent savings to private investors/50 percent loss to the public); Grassley wants to reverse that. Have a look at a pro-ish take on the current law: Why, then, does Grassley the tax-cutter want to stick private equity--which includes coastal giants such as Blackstone, as well as tiny Iowa firms such as Aavin in Cedar Rapids--with doubled taxes? Companies backed by private equity or venture capital grow faster and eventually employ more people at higher wages than other companies. and a pro-reform view: Let's be honest: it is a charade that private equity firms have claimed their 20 percent performance fees at the lower capital gains rate. To qualify, they invest a nominal amount of their own money to demonstrate that they have put something at risk, but it's a ruse. They are paying capital gains rates for doing their job, which should be taxed at the regular income rate.