Timber!

That didn’t take long. Less than a year ago, Montana Democrat Max Baucus, the chairman of the Senate Finance Committee, and his Republican partner Chuck Grassley were promoting a punitive tax hike on hedge funds and private-equity shops. Now it appears that Mr. Baucus, at least, is having second thoughts. Or maybe it’s just that a Montana ox is being gored.

Mr. Baucus’s volte-face arrives in the form of a plan to lower the tax burden for U.S. timber companies, which he is trying to graft onto the farm bill now moving through Congress. Timber sales are treated as capital gains, taxed at 15%. Timber companies, however, face the full 35% corporate tax rate. So to pay the 15%, many companies have restructured as real-estate investment trusts or transferred holdings to individuals. But not all. So Mr. Baucus wants to equalize the tax treatment of all timber concerns, regardless of the corporate structure. Even better, he wants to effectively lower the top rate to 15% from 35%.

Full Story: http://online.wsj.com/article/SB120934099382148443.html

(Thanks to Peter Bertelsen for passing along this article. Russ)