Trump Targets Carried Interest Tax Break for Hedge Fund Managers
Article Summary:
President Trump has announced plans to close the carried interest tax loophole, a deduction that allows hedge fund managers to pay lower capital gains taxes on their compensation. The move comes as part of the Trump administration's tax priorities, which also include ending taxes on tips and adjusting the state and local tax deduction (SALT).
Market Impact:
Private equity firms and hedge funds, which have benefited from the carried interest deduction, saw their stocks decline on the news.
Political Significance:
Eliminating the carried interest deduction has been a priority for Democrats, who argue it is a tax break for the wealthy. President Trump's support for the move could endear him to Democrats but could also face opposition from some Republicans.
Key Players:
* President Trump
* White House Press Secretary Karoline Leavitt
* Drew Maloney, President of the American Investment Council
* Senator Tammy Baldwin
* Senator John Thune
Additional Context:
* Trump has previously discussed repealing the carried interest deduction but has not taken action.
* Senator Kyrsten Sinema previously opposed efforts to close the loophole in 2022.
* The carried interest deduction allows investment managers to pay a lower tax rate on income from their work than regular wage income.
Related News:
* President Trump seeks to end tax break for sports team owners.
* Democrats introduce new bill to eliminate carried interest deduction.