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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsWhy Obama Is Right To Call Out The Carried Interest Loophole (Again)
Why Obama Is Right To Call Out The Carried Interest Loophole (Again)
By Travis Waldron
Thoughout debates over reducing the nations deficit, President Obama has proposed the closure of certain tax loopholes as a way to raise new revenue. The carried interest loophole, which lets wealthy hedge fund managers pay a lower tax rate on certain income, has been chief among the loopholes Obama wants to close, and with the debate over federal spending accelerating yet again, Obama renewed his call to close the loophole in a pre-Super Bowl interview with CBS:
The carried interest loophole is one that benefits a small number of hedge fund and private equity managers, who collect income via management fees and by taking a cut of their investors profits. The loophole allows the portion of income they make from investors profits to be treated as capital gains income, which is taxed at a lower rate than ordinary income. By reducing the amount they collect in management fees and instead taking the majority of their earnings from profits, the managers are able to substantially reduce the amount of taxes they pay on that income.
- more -
http://thinkprogress.org/economy/2013/02/04/1535461/obama-carried-interest-again/
By Travis Waldron
Thoughout debates over reducing the nations deficit, President Obama has proposed the closure of certain tax loopholes as a way to raise new revenue. The carried interest loophole, which lets wealthy hedge fund managers pay a lower tax rate on certain income, has been chief among the loopholes Obama wants to close, and with the debate over federal spending accelerating yet again, Obama renewed his call to close the loophole in a pre-Super Bowl interview with CBS:
OBAMA: There is no doubt we need more revenue coupled with smart spending reductions in order to bring down our deficit. And we can do it in a gradual way so it doesnt have a huge impact. And as I said, when you look at some of these deductions that certain folks are able to take advantage of, the average person cant take advantage of them. The average person doesnt have access to Cayman Island accounts, the average person doesnt have access to carried interest income where they end up paying a much lower rate on billions of dollars that theyve earned. And so we just want to make sure that the whole system is fair, that its transparent, and that were reducing our deficit in a way that doesnt hamper growth, reduce the kinds of strategies that we need in order to make sure that were creating good jobs and a strong middle class.
The carried interest loophole is one that benefits a small number of hedge fund and private equity managers, who collect income via management fees and by taking a cut of their investors profits. The loophole allows the portion of income they make from investors profits to be treated as capital gains income, which is taxed at a lower rate than ordinary income. By reducing the amount they collect in management fees and instead taking the majority of their earnings from profits, the managers are able to substantially reduce the amount of taxes they pay on that income.
- more -
http://thinkprogress.org/economy/2013/02/04/1535461/obama-carried-interest-again/
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Why Obama Is Right To Call Out The Carried Interest Loophole (Again) (Original Post)
ProSense
Feb 2013
OP
ProSense
(116,464 posts)1. Kick! n/t
Still Sensible
(2,870 posts)2. K & R n/t