End the special tax rate for carried interest
Arguments For & Against
Pro Argument
Ending the special rate would ensure that income earned by investment managers (carried interest) is taxed at the same rate as ordinary income, rather than at the lower capital gains rate. This is seen as making the tax system more equitable.
Con Argument
Critics argue that raising taxes on carried interest could discourage investment in businesses, real estate, and startups, as it may reduce the incentive for investment managers to take risks.
| Type | Organization | Date | Nat | Rep | Dem | Gap | Metric |
|---|---|---|---|---|---|---|---|
| New PPC Survey (2026) | Program for Public Consultation | February 2026 | 73% | 70% | 78% | 8% | favor |
| Deliberative Survey | Program for Public Consultation | June 2018 | 84% | 82% | 86% | 4% | other |
Program for Public Consultation — February 2026
Currently, there is a tax law that allows managers of private investment funds (like hedge funds) to have their income taxed at a lower rate than ordinary income. Do you favor: Taxing hedge fund managers' income like ordinary income [OR] Keeping the law that taxes hedge fund managers at a lower rate.
Program for Public Consultation — June 2018
Managers of private investment funds, such as hedge funds, are paid in part by giving them a percentage of the profits of the firm, even though they have not invested money that is at risk. Currently, this income is taxed at the same level as dividends or capital gains – that is, with a top rate of 23.8%, which for high-income managers is substantially less than it would be if it were taxed like ordinary income. Tax this
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