House seeks 35% tax on carried interest, but Senate wants less

The U.S. House recently approved a tax increase on certain compensation paid to investment managers, known as carried interest, but Senate Democrats have watered down the proposal. Income earned by most is taxed as much as 35%, but carried-interest income is taxed at the capital-gains rate of 15%. The Senate proposal would raise the tax to as much as 33% by 2013. The House's proposal would raise the rate to 35%.