U.S. Treasury Secretary Timothy F. Geithner said he thinks the tax rate on carried interest might need to be raised.
“If you look at any tax reform proposal out there that has any patina of bipartisan support, they believe we have to rethink how we treat investment income and carried interest,” Geithner said at a conference in New York today.
Under current law, a manager’s profits from a private-equity fund, known as carried interest, are considered capital gains and therefore taxed at 15 percent.
“Obviously, carried interest doesn’t raise that much revenue,” Geithner said. “If you’re not going to do that, whose taxes are you going to raise?”
Geithner was speaking at the CNBC Institutional Investor Delivering Alpha Conference.