Carried interest tax provision makes it into jobs bill

President Obama proposed a tax on carried interest during the campaign, and the idea appears to be headed for law.

Never heard of carried interest? It's a way of compensating executives, so that instead of wages or a salary, they get "interest" in a business. Income from that interest is taxed at a lower rate than regular wages. The Treasury Department has said the practice is growing among large private equity firms.

Democrats included the measure in the American Jobs and Closing Tax Loopholes Act, which extends measures for economy recovery, such as unemployment insurance and stimulative tax cuts.

The carried interest provision is expected to increase revenues and was included in the bill to offset its cost. House Ways and Means Chairman Sander Levin, D-Mich., and Senate Finance Chairman Max Baucus, D-Mont., said in a statement that the bill would  "close tax loopholes for wealthy investment fund managers."

This is substantial progress on this promise. But until the bill passes though, it remains In the Works.