https://finance.yahoo.com/news/trump-seek-end-carried-interest-184956595.html
Saw that Trump floated ending the ‘carried interest loophole’ in his initial tax proposals. How likely do we think this passes the house and senate? Republican representatives are likely to feel some lobbying heat if they take away the long term capital gains treatment of carry.
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I think there's a good chance it passes. Most GOP Senators are not really beholden to Wall Street/PE money b/c they represent rural states. This was always a hard sell for Dems because a lot of their Senators are very close with PE (NJ/NY/CT+ Sinema in AZ for some reason, and Manchin doing Manchin things). Much likelier this passes under Trump than the half assed attempt under Biden IMO.
Considering how many ultra right wing VC wackos like Andreessen voted for Trump, I hope they are happy with the bed they've made for themselves.
Frankly, the vast majority of senior PE guys I spoke with ended up voting for Trump and in a way I am glad that this backfires in their face.
Amen and awomen, don't have to tell me twice.
Even carried interest taxation aside it was always abundantly clear Trump's populist agenda is not good for business...
If you actually think this passes you’ve got another thing coming. 😂
Only Nixon could go to China. Only Trump could end carried interest.
If he's behind it the rest of Republicans will fall in line. But how likely are they to pass any tax bill? House Republicans are masters in incompetence and they have a razor thin margin. I would not be shocked if there is no tax bill passed.
I would be very surprised if this gets pushed through. It comes up every administration and then people realize there are bigger fish to fry. Plus, all the government officials line their pockets indirectly with the carry $ through donations from wall street, etc.
well time's changed, tech money > wall street money now, check forbes and see how many billionaires are from PE and how many from Tech, and the difference in their wealth
Forbes is not a sophisticated source of wealth measurement. Also not sure if personal net worth is a good metric to measure influence. Lobbying dollars would be better and PE spent more than tech in the last election cycle
This. It’s all a big club, Democrats and Republicans all beholden to the people they claim to represent their voters against. Attend an RNC or DNC and look up at the suites on the top floor - who do you think is renting them, on both sides?
Have you even attended either the DNC or RNC? The crew of rich donors between the two have relatively little overlap. Most very wealthy donors are driven by real ideological alignment.
While this will create short and medium term pain, won’t funds simply adjust over the long term and create new structures that allow them to more or less operate under a similar model?
For sure, absolutely zero chance this ends up affecting anyone who can pay for tax advice.
100%. It's a classic political proposition that makes a nice headline but will achieve absolutely nothing in the long-term. Wall Street will always come up with new structures to circumvent regulations that prevent them from getting what they perceive to be compensatory returns in exchange for the risk they're taking. All the senior guys I know & talk about this stuff with have said they'd expected something like this to drop for the past 10+ years.
I believe fund managers can use options to mitigate income tax on carried interest, as options, if issued at the fund’s inception and held for over a year,will qualify for long-term capital gains treatment, avoiding higher ordinary income tax rates.
UK hikes taxes on private equity, further reforms loom | ReutersFrom a UK perspective, only around 3k people out of a working population of 34m actually earn carry. Hard to understand why we need a different tax treatment for such a small group of people. Politically this is an easy win to show the masses you are on the side of the little guy.
Because they’re a highly mobile group and can easily leave? Because other countries do incentivise it? Because for some funds capital of the investment staff is at risk (agree if the carry is free then it’s a different story)? It’s not that simple
Most of the senior PE professionals I've spoken with about this expected that a tax change would come eventually. It's been a hot topic against wall street for so long. I think we all see the argument against capital gains treatment for carried interest, and don't expect many to see (or care about) the other viewpoint.
So yes I think it's coming eventually. Unsure whether it will really happen under a Trump administration, but interesting that he raised it.
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