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Donald Trump told legislators that he wanted to put an end to the special tax treatment for capital investment and hedge funds known as “interest in”, setting up a potential confrontation with the richest financiers of America.
Trump’s push – at a meeting of the White House Thursday with Republican leaders from Capitol Hill – comes while the president intensifies tax Cut the bill he wishes to adopt this year which is at the heart of his national economic agenda.
Karoline Leavitt, press secretary of the White House, told journalists that Asset had “arranged” his “tax priorities” to the legislators, including measures to “close the tax deduction of tax deduction”, eliminate tax reductions for “owners of billionaire sports teams” and keep campaign promises such as ‘Elimination of income tax on advice.
The special tax treatment of “interests carried” has been the subject of large lobbying fights in Washington for two decades, for investment Speculative groups and funds have become larger forces to Wall Street, attracting politicians.
It is considered to be a “escape” because the profits of capital investment managers and hedge funds are imposed at long-term investment rates, which are generally lower than ordinary income rates.
Many Republicans and certain Democrats have resisted efforts to suppress this preferential treatment, helping the investment capital industry to maintain the status quo. A previous attempt at the start of Joe Biden’s presidency failed.
But Trump, who had tried and failed to eliminate the special tax treatment from investment capital in 2017, now put it back on the table.
“The battle on the interest brought at hand will probably be the most difficult to date,” said a strategist that works closely with the investment capital industry. “Trump wanted this to disappear in 2017 and was blocked by the Congress, but the Republicans of the Congress today do not look like high finance darlings and are much more ready to settle for the president.”
However, Trump’s tax plans should be a boon for Wall Street and US companies, given its objective to extend the rare tax reductions on the income it adopted during its first mandate. But the inclusion of some more populist provisions will test how the Republicans in the Congress move away from the party adapted to the cases they traditionally have. Some Democrats in Congress already adopted Trump’s call on interest.
“Perfect timing. I presented an invoice today to end the escape of the interests worn and make Wall Street pay their fair share. Glad you agree, @potus. It’s time to do it, “said Tammy Baldwin, a Democratic Senator of Wisconsin, on X, referring to Trump.
The 2017 tax bill has reduced the scope of the advantage for investment capital by extending the number of years that an investment must be held before the preferential treatment goes from 1 to three years. Another extension of this period, as an alternative to complete elimination of the escape, would be another scenario.
The debate on the fate of taxes on the profits of investment opens after the Deancakers entered the new year more immediately focused on the antitrust regulators of the president, the draconian directives of the merger, which should start next week , as well as the maintenance of the draconian tax, which should start next week, as well as the maintenance of the draconian tax deductibility of debt and broader tax reductions. Insiders of the industry have long believed that efforts to eliminate the taxes of the interests transported would be failed, as it could also strike investors such as buyers of small goods.
Drew Maloney, president of the principal lobbying group of the investment capital industry, the American Investment Council, said that the law of 2017 had concluded the “good balance” on the interest in focus.
“We encourage the Trump administration and the Congress to maintain this good tax policy in place and to free up longer-term investments that support jobs, workers, small businesses and local communities,” he added .
