President Donald Trump plans to address a tax break enjoyed by Wall Streetâs hedge-fund elite, Reince Priebus, White House chief of staff, said Sunday morning.
âCarried interest is on the table,â he said on ABCâs âThis Week with George Stephanopoulos.â
Guidelines for Trumpâs tax plan were released Wednesday in a one-page summary, which didnât specifically mention so-called carried interest, which he had vowed during his presidential campaign to end. Carried interest is the share of profitsâtypically 20%âthat hedge-fund, private-equity and some other investment managers collect from clients on investments, and it is taxed at a long-term capital-gains rate of 23.8% compared with a rate of 39.6% assigned to ordinary income.
Trump has vowed to close a loophole that he said allowed hedge funds to essentially enjoy a reduced tax rate. Trump said âhedge fund guys are getting away with murderâ in an interview with âFace the Nationâ about two years ago (watch the video below):
However, the Trump administrationâs guidelines on taxes delivered at a news conference Wednesday afternoon by Treasury Secretary Steven Mnuchin and National Economic Council Director Gary Cohn, didnât specifically address the issue of carried interest, which didnât go unnoticed by the New York Times, nor Reuters, which published a story Thursday under the headline âFist bumpsâ at hedge funds over Trumpâs tax plan.
Priebus told the Stephanopoulos program that âthat balloon is not going to stay [inflated] for very long,â referring to the apparent absence from the tax-principles statement of any follow-through on Trumpâs campaign rhetoric regarding carried interest.
Trumpâs chief of staff during didnât offer any fresh details about how carried interest would be tackled nor the rate at which investment managers would be taxed but said the president intends to address the matter in his tax overhaul.
Trumpâs tax plan, which intends to cut corporate interest rates to 15% from…