Steven Rosenthal

Senior Fellow, Urban Institute. Rosenthal researches, speaks, and writes on a range of Federal income tax issues, with a particular focus on business taxes. He practiced tax law in Washington, D.C. for over 25 years, most recently as a partner at Ropes and Gray. Rosenthal also was a Legislation Counsel with the Joint Committee on Taxation, where he helped draft tax rules for financial institutions, financial products, capital gains, and related areas. He is the former Chair of the Taxation Section of the District of Columbia Bar Association. Rosenthal holds an AB and JD from the University of California at Berkeley and an MPP from Harvard University.

The Rich get Richer, with a Little Tax Help

By :: June 22nd, 2015

Renaissance Technologies, an investment manager, is once again showing how to aggressively manipulate the tax system for its own benefit.  This time, Renaissance is helping its owners/employees (who are some of the wealthiest individuals in the country) to shelter tens of millions of dollars in tax-free Roth IRAs. Renaissance manages money for its employees, former […]

Read More

Is Obama Closing Retirement Savings Loopholes or Just Curbing Congress’ Generosity?

By :: January 28th, 2015

In his upcoming budget, President Obama will propose to strip away the “loopholes” that permit wealthy individuals to accumulate large amounts in tax-favored retirement plans. He would prohibit a taxpayer from contributing any more to IRAs or other qualified retirement plans once his or her accounts reach a combined value of $3.4 million. For sure, […]

Read More

Can Obama slow corporate inversions? Yes he can.

By :: August 15th, 2014

Politicians can debate whether corporate tax inversions are “unpatriotic” or simply a legitimate technique to reduce taxes–and commentators can argue over whether anything should be done to stop them. Experts also disagree about whether President Obama and his Treasury Secretary have the legal authority to write new rules to discourage inversions. In my view, on this last […]

Read More

Abuse of financial products by hedge funds

By :: July 22nd, 2014

Today, I testified before the U.S. Senate Permanent Subcommittee on Investigations (the “Subcommittee”) on the abuse of structured financial products by hedge funds, in particular by the Renaissance funds. This is what I told the Subcommittee: Almost a century ago, Congress reduced the tax rate for long-term capital gains. Then, long-term meant holding assets for […]

Read More

A Flash Tax for the Flash Boys

By :: April 18th, 2014

Michael Lewis spotlights high-frequency traders with his new book, Flash Boys.  These traders use high-speed computers and fast connections to outrace investors, and other traders, to the market.  They now account for more than half of all U.S. stock trades.  And the flash boys spend billions to save milliseconds (by, for example, laying expensive fiber-optic […]

Read More

You Could Owe Capital Gains Taxes When You Spend Bitcoin

By :: March 27th, 2014

The IRS determined this week that Bitcoin and other digital currencies should be taxed as property, not currency. This means Bitcoin transactions will be taxed as capital gains, not as ordinary income. But, perhaps surprisingly, the act of spending Bitcoin could trigger capital gains taxes. Thus, the use of virtual currencies as a medium of […]

Read More

Camp Defines Private Equity as a Business, Would Boost Taxes on Carried Interest

By :: February 27th, 2014

In the tax reform roadmap he released yesterday, House Ways & Means Committee Chair Dave Camp (R-MI) targeted the trillion dollar private equity industry.  Not only did he propose to tax the compensation of private equity managers at ordinary rates rather than lower capital gains rates, he also called the industry out. The official description […]

Read More

Court of Appeals Finds a Trade or Business: Could this Mean Higher Taxes for Private Equity?

By :: July 25th, 2013

The First Circuit U.S. Court of Appeals ruled yesterday that private equity funds are engaged in a trade or business under the Employee Retirement Income Security Act (ERISA).  The court said the case, Sun Capital Partners v. New England Teamsters & Trucking, “presented important issues of first impression.”   And the court’s resolution of the trade […]

Read More

Why the IRS Should be Taxing the Profits of Private Equity Funds as Ordinary Income

By :: February 4th, 2013

For years, the battle over carried interest has focused on how to tax the compensation of private equity managers. But a careful reading of  the law suggests that all the business profits of these investment firms, not just the pay of their managers, are ordinary income, and should be taxed that way. Until now, the […]

Read More

Chairman Camp Agrees: Too Many Choices Burden our Tax System

By :: January 28th, 2013

Last week’s draft plan by House Ways & Means Committee Chair Dave Camp (R-MI) to reform the taxation of financial products includes two key changes that would simplify rules, reduce manipulation, minimize compliance burdens, and improve tax administration. The first would require investors to use the “mark-to-market” method of accounting for all derivatives, other than […]

Read More