Closing the carried interest loophole could jeopardize the Democrat reconciliation bill, as some Democrats have fought for an exemption for startups.
Senate Majority Leader Chuck Schumer (D-NY) and Sen. Joe Manchin (D-WV) unveiled the Inflation Reduction Act, a Democrat reconciliation bill that aims to reduce the deficit, extend enhanced Obamacare subsidies, and advance climate change programs.
To raise revenue for the Democrats’ reconciliation bill, the legislation would also create a 15 percent corporate minimum tax, allow Medicare to negotiate the price of drugs, increased IRS tax enforcement, and close the carried interest loophole.
The carried interest “loophole” lets private-equity firms pay lower taxes by letting these firms access a tax-advantaged treatment on their performance pay, or carried interest. This is usually set at