Criticized by Trump, Carried Interest Tax Loophole Is Vulnerable

Give Donald Trump credit for this: The Republican presidential candidate has done more to put a stake in the heart of the carried-interest tax loophole in the last month than the Obama administration has in the last six and a half years.

That’s not for want of trying by the White House. President Obama has proposed closing the loophole in his budget proposals. He has tried to get rid of it as part of bargains on tax reform and budgets. There have also been efforts to kill it in Congress.

Yet it lives on, lining the pockets of billionaire financiers and hedge fund and private equity managers by giving them preferential tax treatment on a large portion of their compensation.

It’s not just Republicans who have kept it alive. Senator Chuck Schumer, Democrat of New York, has voted to change the law. But he has long opposed any overhaul that singled out his wealthy Wall Street constituents and donors when other types of investment partnerships — oil and gas, real estate, timber — also benefit from the lower “carried interest” tax.

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