President Donald Trump has once again vowed to eliminate the carried-interest loophole used by private equity fund managers.
In a meeting with his administration on Thursday, Trump stated that closing the carried-interest loophole is a priority, as it could reduce the national deficit by $13 billion.
The tax code currently sits in favor of private equity, venture capital and hedge fund managers as dealmakers pay a lower rate on their share of profits because these returns are taxed as capital gains instead of normal employment income.
In 2016, Trump unsuccessfully attempted to eliminate the tax perk and “other special interest loopholes that have been so good for Wall Street investors and for people like me but unfair to American workers.”
Trump is not the first president to attempt abolishing the carried interest loophole, as both Democratic and Republican presidents have tried, including President Joe Biden in 2022.
Private equity managers are strongly opposing the proposed changes. Firms like Apollo Global Management Inc., Blackstone Inc., Carlyle Group Inc., and KKR & Co. currently hold billions of dollars in investments that qualify for carried interest.
“President Trump will give us his priorities, but I can tell you the real priority is fixing this affordability crisis for the American people,” Treasury Secretary Scott Bessent said Thursday.
By CEO NA Editorial Staff
