The Trump administration’s push to overhaul tax laws might soon target a loophole used by some financial managers to lower their tax rates, White House Chief of Staff Reince Priebus said on Sunday.
President Donald Trump campaigned before the Nov. 8 election to eliminate the so-called “carried interest” loophole, which is used by many financial managers to lower tax obligations. But a rough outline for a major tax overhaul released last week failed to mention the loophole.
Priebus, however, hinted that carried-interest could be on the chopping block and warned against analysts taking the view that financial managers would keep on benefiting from it.
“That balloon is going to get popped pretty quick,” Priebus told ABC’s “This Week.”
“Carried interest is on the table,” he said. “The president wants to get rid of carried interest so that balloon is not going to stay inflated very long, I assure you of that.”
The carried interest rule allows financial managers at private equity, hedge fund and other firms to pay a capital gains tax rate on their income instead of the higher income tax rate.
Trump’s tax overhaul plan would slash rates for businesses. Vice President Mike Pence told NBC “Meet the Press” on Sunday the plan might widen budget deficits “in the short term,” but faster economic growth would eventually lead to higher revenue.
(Reporting by Jason Lange; Editing by Andrew Hay)