When the Republicans approved the Donald Trump tax bill “Great and Beauty” on Thursday, it included judgments to partially compensate for costs, including the major discounts in stabbing and food stamps. No legislators in the fields have not touched: The so -called vulnerability of the benefits that were carried and that provides useful tax treatment for the managers of the wealthy private stocks, investment capital and hedge fund managers.
the Interest campaigns carry It refers to a ruling on the US tax law that allows investment fund managers, such as the executives of private shares, to pay a less tax rate than ordinary ordinary workers. Private stock companies are usually raised from the capital from investors such as pension funds, insurance companies and high -value individuals. They use these funds, which are called the Fund, to invest in companies, and often control these companies. PE’s executive officials usually receive a share of profits – pregnancy – to manage investments.
When the PE box sells originally, it is likely to be a wallet company, at a price higher than what they bought, carrying Execs PE. If the original is sold after three years, taxes will be imposed on a 20 % long capital profit rate. If they sell business before the three years, taxes are imposed on a 37 % short -term capital profit rate.
The problem is that the tax rate of 20 % is less than many American workers pay every day. A couple of deposit jointly faces, less than $ 206,700, a 22 % tax rate, while a tax is imposed on one person who makes less than $ 197,300 by 24 %, according to 2025 taxes. Meanwhile, many huge salaries for Malian executives are placed at the top of 35 % or 37 % of taxes – so that the vulnerability of the benefits that were carried 20 % both represents both a special advantage for fund managers, and tax tax revenue for the federal government.
The benefit that was carried the problem of a hot button is a perennial button. Over the past twenty years, the lawmakers, including President Barack Obama, have called for Senator Elizabeth Warren (D-Mass) and even Trump himself, to change an interest in order to be dealt with as an ordinary income. Several bills were presented, including one of the Senator Tami Baldwin (D-WIS), which is in February required Taxes that carry interest at the same rate that ordinary workers pay on their income.
Trump, when he nominated for the presidency for the first time in 2016, pledge To change the preserved interest vulnerability, but not followed. Instead, its tax bill since 2017, the tax and tax laws law has made it difficult to qualify for 20 % long -term capital profit rates. Change the law 2017, the period of retention from one to three years, which means that PE companies must Owning one of the assets For a period of three years before they can sell and achieve taxes on profit at a long -term capital profit rate of 20 %. Trump also spoke to Republican lawmakers Change She carried attention in February, but did not take any action.
On Thursday, the draft feverish tax law from Trump, which was approved by the House of Representatives, does not mention interest. This means that the changes imposed by Trump’s law and functions for the year 2017, which made it difficult to secure long -term capital gains, in place.
“The 2017 President’s Law has achieved the right balance on the transferred benefits, and we are pleased that the new legislation will encourage more long -term investment throughout America,” said the American pressure council in the PE industry. luck Thursday.
“What came out of the house this morning does not affect the preserved benefit. The current benefit will remain.”
It is still too early to demand private stocks. The tax law will now go to the Senate, which is likely to make amendments before handing over the legislation to President Trump to sign. “The Senate can be able to make changes to the lawyer’s attention,” Leeds said.
This story was originally shown on Fortune.com
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