POLITICO Morning Tax: New Study Finds Eliminating Carried Interest Could Cost Jobs and Revenue
Today, POLITICO’s Morning Tax covered the recently released report from Dr. Charles Swenson of the University of Southern California, that found eliminating the current tax treatment of carried interest capital gains could cost the federal government nearly $13 billion annually and lead to 1.23 million lost jobs over the long term.
Key excerpts from the coverage include:
- “The federal government potentially could lose as much as almost $13 billion a year in the long run if carried interest — essentially a fund manager’s share of investment returns — is taxed as ordinary income, instead of the lower long-term capital gains rate, according to the study from Charles Swenson…About 1.23 million jobs would also be lost in that scenario, Swenson estimated in the study…
- “Plus, the new study offers the angle that getting rid of carried interest will actually hurt the government’s finances in the end. ‘Everyone is looking for things that don’t cost additional money,’ AIC President and CEO Drew Maloney told Morning Tax.”
- “’Increasing taxes on carried interest will absolutely disincentivize early-stage investment in the technologies of the future,’ said Bobby Franklin, the president of the National Venture Capital Association.”
- “To try and keep the incentive alive, advocates also plan to argue that carried interest supports priorities important to Trump — like domestic manufacturing, and being the leader in areas like artificial intelligence.”
Click here to read Dr. Swenson’s full report, and here for a one-page summary of the key findings.
