That may soon change as the deal struck last week between Sen. Joe Manchin (D-W.Va.) and Senate Majority Leader Chuck Schumer (D-N.Y.) could finally close what’s known as the carried interest loophole.
“Carried interest is a share of the profits that private equity or hedge fund managers take as compensation. It’s a performance fee,” Ruhle explained on MSNBC on Monday night. “And under existing law, this money earned by these executives ― a tiny group of the most highly compensated businesspeople on Earth ― they get taxed at a capital gains rate of just 20 percent.”
That is half the typical tax rate for other high-income earners.
“SO WHY DOES IT STILL EXIST?” she tweeted:
Watch her fuller explanation of the loophole ― and the one Democratic senator who might block closing it ― below. The clip also includes a conversation with former Labor Secretary Robert Reich: