Sen. Tammy Baldwin (D-WI) and Rep. Bill Pascrell (D-NJ) reintroduced legislation Wednesday that would end a tax break on carried interest – the share of profits that hedge fund and private equity managers receive from businesses in which they have investments.
The tax break lets fund managers claim the payments as capital gains, which are taxed at 23.8 percent, rather than ordinary income, which has a maximum tax rate of 37 percent.
The Congressional Budget Office estimated that ending the carried interest loophole would raise $14 billion over 10 years.
Bloomberg’s Laura Davison noted that while Democrats have proposed similar plans for years, the current effort is largely symbolic, with the bill having no chance of passing in a divided Congress.
