Paul L. Caron

Wednesday, May 26, 2010

BET Founder Says Carried Interest Tax Increase Would Hurt Minorities

In my lecture, The Costs of Estate Tax Dithering, 43 Creighton L. Rev. ___ (2010), I talked about the curious politics behind the estate tax repeal movement, including the important role played by the African-American and LGBT communities in supporting estate tax repeal (as reflected in a West Wing clip). Robert L. Johnson, founder of Black Entertainment Television (BET), played a leading role in the African-American community's push for estate tax repeal.  Mr. Johnson on Tuesday issued this statement arguing that the proposed carried interest tax increase in the financial regulation bill would hurt minority businesses, entrepreneurs, and jobs:

“In my opinion, this legislation would cause a rapid decline in minority private equity firms and possibly eliminate minority participation in this important financial sector of the American economy.

Minority firms have difficult challenges in attracting fund investors and an even more difficult time attracting top managerial talent. If this legislation is approved, it will become even more daunting for minority firms. Historically, minority firms generate less investment capital than major firms, require more time to raise funds compared to larger firms, and, as a consequence, if taxes are raised on minority companies the same as it exists for large firms, talented minority men and women would likely choose to stay at their existing firms.

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Sure, when I ran for Congress, minority women and children frequently told me that carried interest was their principal concern.

Posted by: mike livingston | May 26, 2010 6:39:55 AM

If he hadn't already run the Bobcats into the ground you might also expect him to say that taxing NBA teams decreases minority participation, therefore NBA teams should be tax exempt.

Posted by: Matt | May 26, 2010 8:04:09 AM

It's like the old Washington Post headline joke - "God ends world tomorrow; women and minorities hit hardest."

Posted by: Woody | May 26, 2010 8:31:50 AM