Carried-Interest Tax Break Shrinks, Survives in Democrats’ Plan
- Carried interest offers lower tax rate than for income
- Biden administration had proposed eliminating the tax break
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House Democrats want to restrict the use of a prized private-equity tax break to help fund President Joe Biden’s economic agenda, but their proposal falls short of eliminating the carried-interest provision criticized by some members from both political parties.
The plan, released Monday by the Ways and Means Committee, would generally require investment funds to hold assets for more than five years -- up from three years -- in order for managers to get a preferential tax rate on their share of the fund’s profits, known as carried interest.