The Government could take away or reduce substantially the tax benefits of MLPs (to raise needed revenues) thus making these investments less attractive over the common stock equivalent investments.
Limited Partnerships Let Wealthy Play Oil Tycoons in Yield Hunt
noir.bloomberg.com
From the article:"...Investors are pouring into energy-related MLPs, increasing their market capitalization 20 percent as of July to $183 billion from $152 billion in 2009, said Michael Blum, a managing director at Wells Fargo Securities, a unit of San-Francisco- based Wells Fargo & Co. About 90 percent of new equity in the partnerships last year came from retail investors, he said. ..."
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"...Typically 75 percent to 80 percent of the cash distributions are tax-deferred until units of the MLP are sold, which is appealing to high-income earners worried about taxes, said Lyman. In 2011, federal income tax rates are expected to rise to as high as 39.6 percent from 35 percent, unless Congress acts.
Broke Government
Moore, the investor, said he worries the government might take away the tax advantages of MLPs to raise revenue..."
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Maybe thats a reason to stay with a Fund rather than with individual MLPs.
EKS |
