Any major changes to private equity’s most favored tax break won’t happen until 2017, House Ways and Means Committee Chairman Paul Ryan said.

Ryan said he’s excluding the taxation of carried interest from this year’s bipartisan attempt to revamp business taxes, sparing fund managers from any change.

“That is on the individual side of the code, so it’s not something that we’re looking at right now,” Ryan, a Wisconsin Republican, said at an accounting conference in Washington Tuesday. “That’s what we see as a 2017 conversation.”

Ryan’s comments make it less likely that President Barack Obama will be able to follow through on part of his campaign platform from 2008 and 2012. Obama wants to tax the carried interest of private-equity managers, venture capitalists, some hedge fund executives and real estate managers as ordinary income instead of capital gains.

That proposal would raise $17.7 billion over a decade, according to the Treasury Department. Carried interest is the profits interest that private-equity managers receive in the companies they take over and manage.

It’s typically a 20 percent stake in profits earned by the investments and subject to a 23.8 percent top tax rate on gains rather than the 43.4 percent rate that applies to wages.

Obama attempted last week to reinvigorate the effort to raise taxes on carried interest, mentioning it at a Georgetown University forum on poverty -- with some of his sharpest language yet about wealthy financiers.

‘Lottery Winners’

“The top 25 hedge fund managers made more than all the kindergarten teachers in the country. So when I say that, I’m not saying that because I dislike hedge fund managers or I think they’re evil,” Obama said on May 12. “If we can’t ask from society’s lottery winners to make that modest investment, then really this conversation is for show.”

Despite their disagreement on carried interest, Ryan and Obama are trying to reach a deal this year that would revamp the U.S. international tax system and lower the corporate tax rate.

Obama doesn’t want to lower individual tax rates, the ones that also apply to businesses organized as partnerships, including hedge funds and private equity funds.

That decision, Ryan said, means that Republicans are trying to change the tax code in two stages. Carried interest will come later, and any changes to its tax treatment could be used to lower individual tax rates.

Tax Breaks

Republicans also have resisted using changes to carried interest to pay for other tax breaks or spending.

Ryan didn’t offer an opinion on merits of the issue, in response to a question from an audience member at the conference, hosted by the American Institute of Certified Public Accountants.

“I’m not going to give you the answer you’re looking for,” he said. “I don’t even know which one it is.”

Ryan resists some arguments on the issue made by Democrats, and said he sees a difference between ordinary income and “risk-based capital income” earned by taxpayers.

“The thing that I don’t think we ought to be doing is buying into class warfare,” Ryan said. “So in that particular conversation, what I find is a big class warfare argument.”