Can anyone handicap the risk that Congress could reverse the tax advantage that MLPs have? Is this a REAL risk? Or is the chance of such a tax change extremely remote? Opinions please. I have no idea and it is the only reason that my current position in KMP (KMR) is not larger.
Search for MORGAN STANLEY RESEARCH April 17, 2013 Midstream Energy MLPs Primer ~ Threat of losing tax status remains minimal. The government already regulates MLPs and allowed tax advantages for incentivizing critical US infrastructure build out.
Morgan Stanley places the likelihood of legislation passing as minimal, given the its effect (however small) to unemployment. Additionally, MLPs would make up a small portion of tax revenue. In an already tightly regulated industry, the threat to the tax treatment appears low.
A change in tax law would require the GOP and the Dims in the house and senate to agree on something. Probably most if not All the politicians hold MLP along with there contributors . They are gearing up for 2014 midterm election and have three minimum scandals to hash out. I predict business as usual with nothing accomplished. I have never heard anyone mention this except short traders on a Dividend run.