Hedge Fund Managers' Carried Interest Tax Deduction Targeted by President Trump
Summary:
President Trump has expressed his intention to eliminate the carried interest tax deduction, a move that could potentially impact hedge fund managers and private equity firms. This proposal has been met with opposition from the industry and some Republicans, while Democrats have expressed support.
Key Points:
* President Trump has identified the carried interest tax deduction as a target for tax cuts.
* The deduction allows investment managers to pay a lower capital gains tax rate on income from compensation.
* Elimination of the deduction could face resistance from hedge fund and private equity industries.
* Some Democrats support the move, while some Republicans remain skeptical.
Background:
* Trump has previously promised to repeal the carried interest deduction but has not yet followed through.
* Private equity firms like Apollo Global Management, KKR, and Blackstone have been negatively impacted by the announcement.
* The American Investment Council has advocated for the retention of the carried interest deduction, arguing that it promotes long-term investment.
Industry Response:
* Hedge fund and private equity industries are expected to lobby against the proposed elimination of the carried interest deduction.
* Drew Maloney, president of the American Investment Council, has urged President Trump and lawmakers to maintain the current tax policy.
Political Landscape:
* Democrats have generally supported the elimination of the carried interest deduction.
* Republicans are more divided on the issue, with some opposing the change and others remaining undecided.
* Senate Majority Leader John Thune has previously opposed efforts to close the carried interest deduction loophole.