A proposal to raise new revenue that is being floated by Congress is to levy an additional tax on carried interest (the share of capital gains earned, in this case, on long-term real estate investments). The carried interest tax was originally targeted at hedge fund managers, but by including real estate investment partnerships as part of the taxable entities, the Wall Street Journal called this part of the provision the "Family Business Revenue Act.” By increasing the tax from its current 15% rate to a potential top rate of 38.5% (part income tax and part capital gains tax), and by focusing on partnerships (a popular business structure used by families), the decrease in after-tax returns for all investors will ultimately reduce available capital. This happens at a time when Congress should be incentivizing long-term investment not deterring it.

Real estate investments make up the largest category (48%) of partnerships, representing $4.4 trillion by 6.8 million investors. FEUSA could further research this category, and highlight the consequences to family real estate partnerships. Tax rates obviously matter. And what matters about them is what activities get taxed, not who gets taxed. When you increase the tax rate on an activity, such as real estate investment, you get less of the activity; the question is how much less of it you will get. FEUSA could attempt to answer this question. It will then be important, to highlight this threat in terms of the long-term thinking of family business owners and their willingness to invest in real estate given the current market (without this tax and with this tax). The message of being owners rather than renters (commitment to the community) also plays into the debate here.