Obama Renews Carried Interest Tax Fight with Republican Help
(Bloomberg) President Barack Obama, seizing on a lifeline from Republican presidential candidates, is dusting off his campaign to end a tax break exploited by private-equity managers, venture capitalists and some hedge fund executives.
Using the backdrop of a budget fight with Congress that is threatening a government shutdown, Obama made his pitch to some of the nation’s top chief executives to tax income earned by fund managers, called carried interest, as ordinary income instead of capital gains.
“Keeping this tax loophole, which leads to folks who are doing very well paying lower rates than their secretaries, is not in any demonstrable way improving our economy,” Obama told executives at a Business Roundtable gathering Wednesday in Washington.
Rising income inequality has made hedge fund managers the target of Democrats and Republicans seeking the 2016 presidential nomination, and some Republicans in Congress have expressed openness to the idea of raising the tax rate on carried interest.
Any push to make the change is a long-term play. House Ways and Means Committee Chairman Paul Ryan has said the proposal won’t make it into the tax debate at least until 2017, when a new occupant will be in the White House, and Republicans will attempt to revamp the entire tax code. Read more on Accounting Today.