Hillary Clinton and Donald Trump agree on one thing: Hedge fund managers should pay more taxes

Common ground.(AP Photo/Patrick Semansky)

 One of the only things Hillary Clinton and Donald Trump agreed on during the second presidential debate was the need to eliminate the carried interest tax loophole.

Carried interest is the portion of their clients’ profit paid to managers of private equity, venture capital, real estate, and other funds in return for managing those funds. The payments are the managers’ compensation, for which the top tax rate would otherwise be 39.6%. But because of the loophole, carried interest is instead taxed at the capital gains rate, which tops off at 23.8%.

“Rarely has a policy existed so long with such weak arguments in its favor,” former US Treasury secretary Larry Summers has said of the loophole.



Full story at QZ.
By Kevin J. Delaney.