President Donald Trump previously tried to close the carried interest tax loophole in 2017, but Republican lawmakers ignored his efforts due to internal disagreements|@WhiteHouse|X
President Donald Trump wants to eliminate the carried interest tax break, a loophole that allows private equity and venture capital managers to pay lower taxes on their investment earnings.
The president told Republican lawmakers on Thursday to remove it as part of a broader tax bill aimed at offsetting massive GOP tax cuts planned for this year. Treasury Secretary Scott Bessent said the administration is just beginning tax policy discussions.
How does carried interest work?
Private equity investors, venture capitalists and hedge fund managers pay a 20% capital gains tax on their investment earnings (profit from their funds, known as carried interest) instead of a 37% income tax.
Trump previously tried to close this loophole in 2017, but Republican lawmakers ignored his efforts due to internal disagreements.
White House Press Secretary Karoline Leavitt said Trump also wants to end tax breaks for billionaire sports team owners. While he campaigned on the issue in 2016, he hasn’t focused on it much this time. His renewed push signals that tax reform is his key priority this term.