Schumer: Hedge Fund Tax Won't Hurt NYC

A tax-hike on hedge fund managers won't hurt New York's competitiveness in the financial world, Sen. Chuck Schumer said today in rolling out the Senate's version of the latest jobs bill.

To raise some revenue to pay for the measure, the House called for taxing most of the income that fund managers make off their client's investments at regular income at rates up to 39.6% instead of at the 15% capital gains rate.

Republicans [complain the tax will stifle investment ](http://www.foxnews.com/opinion/2010/05/28/steve-forbes-american-jobs-clo...)and stunt job growth, but some opponents of the tax also fear it could hurt hedge-fund heavy New York. But not Schumer.

"No, I am not worried and I think, you know, that the proposal that (Senate Finance Committee Chairman Max) Baucus made goes across the board," Schumer said. "It affects private equity and hedge funds. It affects real estate. It affects venture capital and that's how it should be."

The House version aimed to tax 75% of the carried interest as regular income, raising nearly $18 billion. The Senate wants to stop at 65%, raising a bit over $14 billion.

The bill also extends a number of tax breaks for small businesses, extends unemployment insurance (but not COBRA payments), and would deliver $24 billion to state Medicaid programs (including more than $3 billion for New York) to help plug local budget holes.