New Effort To Abolish Carried Interest Tax Break Begins In Congress
A bill to do away with a tax break that has been in the crosshairs of reformers for years has been introduced in the U.S. House of Representatives.
Derided by critics as a loophole, the tax break, known as carried interest, which benefits equity fund managers but also partnerships that own commercial real estate, has remained part of the tax code since 1954.
Under the Carried Interest Fairness Act of 2021 (H.R. 1068), the share of a private fund or partnership s profits that is paid to managers as part of their compensation, or carried interest, would be taxed as ordinary income at a rate of as much as 37%. Under existing tax law, it is taxed at the lower capital gains rate, a maximum of 23.8%.
Increasing taxes on investment is always a bad idea. Increasing taxes on investment during an economic crisis is economic malpractice. And yet, Reps. Bill Pascrell Jr., D-N.J.; Andy Levin, D-Mich.; and Katie Porter, D-Calif., have a new bill that does just that. Their proposal would increase taxes on investments that support businesses and jobs all across in America at a time when investments are needed more than ever.
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