Trump Targets Carried Interest Tax Break in Tax Cut Discussions
White House Press Secretary Karoline Leavitt announced President Trump's support for closing the carried interest tax deduction loophole. The move could appease Democrats but face skepticism from some Republican colleagues.
Hedge Fund Lobbying Expected
The hedge fund industry and private equity firms, which benefit from the deduction, are likely to lobby heavily against any changes.
Impacts on Investment Firms
The deduction allows investment managers to pay a lower capital gains tax rate on their earnings. Apollo Global Management, KKR, and Blackstone saw their stock prices decline following Leavitt's remarks.
Trump's Past Promise
Trump previously promised to repeal the deduction but failed to deliver. The 2017 Tax Cuts and Jobs Act did not include a repeal.
Industry Advocacy
American Investment Council President Drew Maloney advocates for retaining the current carried interest tax adjustment, claiming it balances investment incentives.
Democratic Support
Eliminating the deduction has long been a priority for many Democrats. Senator Tammy Baldwin and Representatives Marie Gluesenkamp Perez and Don Beyer have introduced a bill on the matter.
Republican Skepticism
Senate Majority Leader John Thune has previously opposed closing the loophole. Senator Kyrsten Sinema also played a role in blocking previous efforts to repeal the deduction.