The House tax bill released Thursday preserves the carried interest tax break—paid to private-equity managers, venture capitalists, hedge fund managers and certain real estate investors—despite President Donald Trump and GOP leaders’ promise to do away with loopholes for the wealthy.
When asked about carried interest, Ways and Means member Jim Renacci, an Ohio Republican, confirmed there was no change.
White House Adviser Gary Cohn has said Trump is committed to ending the carried interest tax break, even though it also wasn’t specified in the Republican tax framework that was issued last month. Trump highlighted the carried-interest tax break during his populist presidential campaign, labeling some hedge fund managers as “paper pushers” who are “getting away with murder.”
Carried interest is the portion of a fund’s profit—usually a 20 percent share—that’s paid to investment managers. Currently, tax authorities treat that income as capital gains, making it eligible for a rate as low as 23.8 percent. The top tax rate for ordinary income is currently 39.6 percent.