White House officials blamed “entrenched interests” for failure to close the so-called carried interest loophole in a tax bill that passed Congress on Friday, saying even former President Barack Obama couldn’t pull off the policy change.
The loophole allows some wealthy investors to pay a 23.8 percent tax rate on de facto income, lower than the nearly 40 percent rate they would otherwise pay as top-bracket earners.
Trump made closing the loophole a campaign issue, saying people benefiting from the policy were “getting away with murder.”
“They pick a stock and all of sudden they make a lot of money. I want the hedge fund guys to pay more taxes,” he said. An estimate from the Joint Committee on Taxation group found nixing the policy would increase tax payments $1.2 billion over 10 years.
White House officials told reporters failure to include the policy change in the tax bill was not attributable to a specific lawmaker.
“The president, you know, campaigned on eliminating the carried interest deduction, it was something he asked us to try to push for in this bill,” a senior administration official said during a background briefing shortly after final bill passage.
“There’s not any one individual,” he said. “There are lots of people who want to protect that carried interest deduction, either for their own policy reasons or because that’s obviously a well-entrenched lobby here in D.C.”
“We were unsuccessful in getting that deduction removed and we’ll fight another day,” he said.
Another senior administration official added that Obama also failed to make the change.
“This was also a priority of President Obama’s,” the second official said. “He also did not get it done when he had 60 votes in the Senate and a huge Democratic majority in Congress. So this is sort of entrenched on both sides of the aisle.”
