Carried interest, which is essentially the profits reaped by hedge fund managers and private equity executives, is currently taxed at a long-term capital gains rate<br />that is about half the roughly 40 percent ordinary income rate for the highest earners.<br />That reading is based on the proposal subjecting pass-through entities — which include partnerships like private equity firms<br />and hedge funds — to a 15 percent tax rate, which is lower than the rate on capital gains and much lower than the top rate on ordinary income.<br />If that turned out to be the case, private equity and hedge fund managers will have dodged a bullet, having long feared<br />that Mr. Trump might make good on his populist rhetoric and seek to have carried interest taxed as ordinary income — rather than as capital gains.<br />Trump Tax Plan Silent on Carried Interest, a Boon for the Very Rich -<br />By MATTHEW GOLDSTEIN and BEN PROTESSAPRIL 27, 2017<br />When the Trump administration unveiled its outline of a tax plan on Wednesday, officials trumpeted a bold promise<br />to shave the corporate tax rate to a flat 15 percent and sharply reduce taxes for ordinary Americans.<br />Before he was selected for his role, Mr. Ross, an early supporter of Mr. Trump’s, said<br />that a Trump tax plan would crack down on the carried interest loophole.<br />Mr. Trump’s close ties to hedge fund managers and private equity executives make it easy for his critics to assume<br />that the plan would provide a tax benefit to the ultrawealthy.
