Two big business lobbying groups are sitting out the fight in Congress over increasing taxes on private-equity earnings—in part, the Financial Times reports, because many of their members are threatened by the rise of private equity. Big firms like Blackstone pay traditional banks hefty fees for the underwriting their IPOs, but they also take business away from them.
Because of a loophole, private-equity partners are taxed at a much lower rate than banking executives, and they're not seeing broad support in the banking community to keep it that way. The Business Roundtable and the Financial Services Forum—two of the most influential groups—are staying neutral. "Of the battles we need to fight on policy, this is not one of them," says the Business Roundtable.