Access to Capital Coalition (ACC) of Minority and Women-Owned Businesses Reaffirm Opposition to New Tax Bill

Tax on Carried Interest Could Hurt Investment in Small and Minority

Businesses

    WASHINGTON, Nov. 2 /PRNewswire-USNewswire/ -- Access to Capital
 Coalition (ACC), a coalition representing minority and women-owned
 businesses in the private equity, real estate, hedge fund and other asset
 management industries, and small business, minority and women
 entrepreneurs, announced today that it opposes provisions in H.R. 3996,
 legislation reported on Thursday, November 01, 2007, by the U.S. House Ways
 and Means Committee, that calls for the elimination of the capital gains
 treatment of carried interest for private investment partnerships. The ACC
 is particularly concerned about the likely adverse impact on small and
 medium-size private investment firms -- which includes a disproportionate
 number of minority- and women-owned firms. Further, because a significant
 amount of assets under management by minority- and women-owned and other
 small and mid-size private investment firms are invested in the same types
 of firms, the negative impact will be felt across the small business
 sector. These effects also will be experienced in the communities where
 many of these firms do business, including undercapitalized communities.
     "In addition to investing in minority- and women-owned businesses, as
 well as other small business owners, and on behalf of our investors, we
 need to be able to re-invest in our own businesses," said Brian P. Mathis,
 Managing Partner, Provident Group Asset Management, LLC and a founding ACC
 member. "The elimination of the capital gains rate for carried interest,
 resulting in an increased tax rate from 15% to up to 35%, will reduce the
 ability to re-invest capital in our own businesses threatening not only our
 ability to invest in others but our very ability to survive in this
 industry."
     "The legislation poses serious problems for small businesses and
 especially small private capital businesses," said Small Business and
 Entrepreneurship (SBE) Council President & CEO Karen Kerrigan, who also is
 the founder of Women Entrepreneurs, Inc., a nonpartisan business
 association dedicated to increasing economic opportunities and financial
 security for women and an ACC member. "It will lead to much less
 capitalization which many of these firms already struggle with," said
 Kerrigan.
     "Although unintended, changing the tax treatment of carried interest
 will have a particularly adverse impact financially on small firms, which
 is the size of most minority- and women-owned private investment firms, as
 well as the entrepreneurs they invest in, which also tend to be small
 businesses, and the communities where they invest," said ACC member Ginger
 Lew, Chair of the Board for the Association of Asian American Investment
 Managers. Lew went on to say, "We definitely understand the complexity of
 all of the issues and would welcome an opportunity to work with the
 Congress in addressing the matter of carried interest."
     The Access to Capital Coalition (ACC) is an association of minority-
 and women-owned private investment firms, including private equity, hedge
 and real estate funds, affiliated trade associations and minority and women
 entrepreneurs. The coalition has been established to oppose legislation to
 increase the tax rate for carried interest and to bring attention to the
 challenges minorities and women continue to face in gaining access to
 capital. For more information, visit www.accesstocapitalcoalition.com .
 
 

SOURCE Access to Capital Coalition