The process of enacting new legislation often requires politicians to participate in complicated negotiations involving the give-and-take of points. Unfortunately, potentially material tax changes are the bargaining chips being wielded in connection with the Biden administration’s infrastructure plan. The Foundation Research Associates recently hosted a program examining potential tax changes most relevant to private funds under the American Jobs Plan, Made in America Tax Plan and American Families Plan. Notably, the panelists – KPMG principal Anthony Tuths and Citrin Cooperman principal Jean‑Paul Schwarz – not only analyzed the proposed tax changes, but also opined on the likelihood of each being included in the final legislation. This second article in a two-part series reviews proposals to increase tax rates for ordinary income and capital gains; tax carried interest as ordinary income; and subject LPs to self-employment tax in certain situations. The first article explored the current political landscape behind the proposed tax changes, as well as the proposal to treat transfers of appreciated property by gift or on death as realization events. See our three-part series on tax issues and estate-planning: “Obstacles Associated With Transferring Carried Interest in PE Funds” (Jan. 14, 2020); “Strategies for Transferring Rights to Carried Interest in PE Funds” (Jan. 21, 2020); and “Possible Solutions for Tax Problems With Valuing Gifts and Sales of Carried Interest in PE Funds When Estate Planning” (Jan. 28, 2020).