Democratic lawmakers targeted tax breaks, executive stock options and corporate jets enjoyed by hedge fund managers and private equity advisers. Democrats and Republicans were seeking to seal a budget agreement by December 13.
According to Bloomberg, Democrats said raising revenue could restore some of the USD1 trillion in automatic spending cuts that were now in place.
The Democrats' list of options included a proposal to limit the ability of businesses to avoid payroll taxes by claiming income as business profits. The said proposition could save USD12 billion in the next 10 years.
Another option proposed was the carried-interest treatment. This would allow hedge fund managers and private equity advisers to pay a 20% tax rate on their income instead of the country's top income rate of 39.6%. This would save over USD17 billion over a decade.
Additionally, limiting corporate deductions for excessive executive stock options could save as much as USD 50 billion. Ending preferences for corporate jets, yachts and vacation homes would yield another USD19 billion, according to Democrats' estimates.
The House Budget Committee would reconvene on November 13 for further deliberations on the federal budget.
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