Eliminating Hedge Fund Tax Loophole Tops Trump's Agenda
In a meeting with Republican lawmakers, President Trump targeted a favorable tax deduction utilized by hedge fund managers, spokesperson Karoline Leavitt announced. This move, if realized, could gain Trump support among Democrats but potentially face resistance from Republican colleagues.
Leavitt outlined the administration's tax priorities, including a vow to "close the carried interest tax deduction loophole." This deduction allows fund managers to pay a lower capital gains tax on income earned from compensation.
The hedge fund industry and private equity firms have vehemently lobbied against eliminating this deduction. Notably, companies such as Apollo Global Management, KKR, and Blackstone witnessed a decline following the announcement.
Despite previous promises to repeal the deduction, Trump's efforts have yet to bear fruit. American Investment Council President Drew Maloney advocates for its retention, arguing that adjustments made in 2017 "struck the right balance."
Leavitt also proposed ending a tax break for sports team owners and adjusting the state and local tax (SALT) deduction.
Eliminating the carried interest loophole aligns with longstanding Democratic priorities. Senator Tammy Baldwin and Representatives Marie Gluesenkamp Perez and Don Beyer recently introduced a bill addressing this issue.
However, gaining support within Trump's own party may prove challenging. Senate Majority Leader John Thune has played a key role in opposing previous attempts to close the loophole.