White House Economic Advisor Gary Cohn told CNBC on Thursday that President Donald Trump remains committed to ending the carried interest deduction.
It’s not clear whether that would apply to private equity firms. Treasury Secretary Steven Mnuchin has previously said that the carried interest tax break would still apply to job creators, which would include private equity and venture capital firms. According to Mnuchin’s comments, the end to the carried interest break would only apply to hedge funds.
The US government released a nine-page US Tax Reform Framework on Wednesday. However, the framework made no mention of changes to tax on carried interest, but did reference “special tax regimes” that apply to “certain industries and sectors”. It said these rules will be modernised to ensure that the tax code better reflects economic reality and that “such rules provide little opportunity for tax avoidance”, as reported by sister publication private funds management.
“As we continue to evolve on the framework the president made it clear to the tax writers in the Congress that that is his position, that was his position during the campaign and he continues to support the position that carried interest is one of the loopholes we talk about when we talk about getting rid of loopholes that affect wealthy Americans,” Cohn said on CNBC. “That is one of the loopholes that we’re referring to.”