WASHINGTON (Bloomberg) — House Democrats will propose more than doubling taxes on money managers at private-equity and venture capital firms to pay for the renewal of 45 tax breaks due to expire soon, a Democratic aide said.

Matthew Beck, a spokesman for the House Ways and Means Committee, said lawmakers will seek to raise the 15 percent tax rate on "carried interest," a term for the share of a fund's profits that is paid as compensation to fund executives.

Beck said the House may vote as early as next week on the $30 billion plan to renew tax breaks including a research credit promoted by companies such as Midland, Michigan-based Dow Chemical Co., deductions for teachers and college tuition, and breaks for state sales taxes that mostly benefit residents of states with no income tax like Florida and Texas.

President Barack Obama proposed raising taxes on fund executives in his first budget earlier this year. An increase would affect general partners at buyout firms, hedge funds, venture capital firms and other partnerships including real estate and oil and gas investments.

Managers typically are paid two percent of fund assets as an annual management fee and 20 percent of the profit earned for investors above certain levels. While the management fee is taxed as income, the incentive fee, called carried interest, is treated as a capital gain.

The action would force managers to pay ordinary income tax rates instead of capital gains rates on their share of profits. The top ordinary rate is 35 percent and is scheduled to increase to 39.6 percent in 2011; the capital gains rate is 15 percent and will rise to 20 percent in 2011.

The House passed such a tax increase in June 2008 for executives at firms such as Blackstone Group LP and Carlyle Group in an effort to fund middle-class tax cuts. The plan failed because of opposition in the Senate and from the Republican administration of then-President George W. Bush.

Michigan Representative David Camp, the top Republican on the tax-writing House Ways and Means Committee, said his party would oppose the provision as it has in the past.

"I don't think we should have permanent tax increases on some groups to pay for temporary extensions of law that benefit somebody else," Camp said.

Republicans also believe the tax would hurt investment. "It's basically a tax increase on every real estate transaction in America," he said.

He said an alternative may be an unrelated House-passed proposal to ban paper companies such as Memphis, Tennessee-based International Paper Co. from claiming an estimated $24 billion in tax credits for converting a byproduct of pulp-making called "black liquor" into biofuel.

"That's a less objectionable pay-for," Camp said.

In the Senate, Finance Committee Chairman Max Baucus of Montana, a Democrat, believes the issue is "best dealt with in the context of an overall tax reform," spokesman Dan Virkstis said in an e-mail.

Douglas Lowenstein, president of the Private Equity Council, a Washington trade group for buyout firms including the Blackstone Group, said in an e-mail that raising the tax "when the economy is struggling to recover could prolong the recession and deprive American businesses in a wide range of industries of the capital they need to survive and grow".

Congressional budget rules require renewal of the 45 tax breaks to be offset with tax increases or spending cuts so they don't add to the federal budget deficit, which totalled $1.4 trillion for the fiscal year that ended September 30. The legislation would also be partly funded through provisions aimed at curbing the use of offshore banks to evade taxes.