You are currently viewing Carried Interest Is Back in the Headlines. Why It’s Not Going Away.

Changes demanded by Senator Kyrsten Sinema will preserve a tax loophole that Democrats have complained about for years.

For years, Democrats and even some Republicans such as former President Donald J. Trump have called for closing the so-called carried interest loophole that allows wealthy hedge fund managers and private equity executives to pay lower tax rates than entry-level employees.

Those efforts have always failed to make a big dent in the loophole — and the latest proposal to do so also faltered this week. Senate leaders on Thursday announced that they had agreed to drop a modest change to the tax provision in order to secure the vote of Senator Kyrsten Sinema, Democrat of Arizona, and ensure passage of their Inflation Reduction Act, a wide-ranging climate, health care and tax bill.

An agreement reached last week between Senator Chuck Schumer, the majority leader, and Senator Joe Manchin III, Democrat of West Virginia, would

Keep reading this article on The New York Times Business.

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