Trump Targets Hedge Fund Tax Break
President Trump met with Republican lawmakers on Thursday to discuss tax cuts, expressing an intention to close the carried interest tax deduction loophole. The move could potentially garner support from Democrats but raise skepticism from GOP colleagues.
The carried interest deduction allows investment managers to pay a lower capital gains tax rate on compensation income. This deduction has been a focus of elimination efforts from Democrats for some time.
White House Press Secretary Karoline Leavitt stated that the President is committed to working with Congress to close the loophole. The move would likely face intense lobbying from the hedge fund industry and private equity firms that have benefited from the deduction.
Trump has previously promised to address the carried interest deduction but has not yet succeeded. Some Republicans, such as Senator John Thune, have opposed closing the loophole in the past.
Democratic Senator Tammy Baldwin and other lawmakers have recently introduced a bill to eliminate the carried interest deduction. Baldwin welcomed Trump's support for the issue.
The potential impact of eliminating the carried interest deduction on the hedge fund industry and private equity firms remains to be seen. The move could also influence the political landscape, potentially appealing to Democrats while sparking resistance from some GOP members.