Linda Sánchez on Eliminating the Carried Interest Tax Provisio
Washington, D.C. – Rep. Linda T. Sánchez (CA-38), a member of the Ways and Means Committee, today issued the following statement on ending the carried interest tax provision:
“It’s encouraging to see efforts to tackle to our increasingly complicated and unfair tax code gain national attention. Our nation is facing staggering income inequality, in large part due to a tax code tilted in favor of the already wealthy. Revenue generated by eliminating the unfair carried interest tax provision should be used to help working families by investing more in to education, infrastructure, and middle-class growth – not to lower rates for Wall Street millionaires.
“As we debate tax reform, our priority needs to be creating a fairer tax code for hard working Americans. Ending the carried interest tax provision is one of the few basic, straightforward ideas proposed by both parties. We must work together to build off of this common ground.”
Background on the Carried Interest Tax Provision
The carried interest provision allows certain investment fund managers – including private equity fund managers – to take advantage of the preferential 20-percent tax long-term capital gains rate on income received as compensation, rather than the ordinary income tax rates of up to 39.6-percent that all other Americans pay. Eliminating the carried interest provision would ensure this income is subject to ordinary income tax rates rather than the much lower long-term capital gains rate.