Hirono, Colleagues Introduce Legislation to Close Tax Loophole and Make Private Equity Pay Their Fair Share

~ On Tax Day 2024, Senators introduce bill to eliminate carried interest tax loophole and make wealthy fund managers pay what other American workers do ~

WASHINGTON, DC – U.S. Senator Mazie K. Hirono (D-HI) joined Senators Tammy Baldwin (D-WI), Joe Manchin (D-WV), Sherrod Brown (D-OH), and 10 colleagues in introducing the Carried Interest Fairness Act, legislation to eliminate a tax loophole that benefits wealthy money managers on Wall Street.

The carried interest loophole allows investment managers to pay the lower 23.8 percent capital gains tax rate on income received as compensation, rather than the ordinary income tax rates of up to 40.8 percent that they would pay for the same amount of wage income.

The Carried Interest Fairness Act will require carried interest income to be taxed at ordinary wage rates. According to the Treasury proposal, closing this loophole will raise $6.5 billion in revenue over 10 years.

The Carried Interest Fairness Act of 2024 is supported by AFL-CIO, American Federation of State County and Municipal Employees (AFSCME), Americans for Tax Fairness, Communications Workers of America (CWA), Main Street Alliance, Patriotic Millionaires, Public Citizen, Small Business Majority, United for Respect, NETWORK Lobby for Catholic Social Justice, National Women’s Law Center, Economic Policy Institute, and 20/20 Vision.

In addition to Senators Hirono, Baldwin, Manchin, and Brown, this legislation is cosponsored by Senators Sheldon Whitehouse (D-RI), Chris Van Hollen (D-MD), Ed Markey (D-MA), Elizabeth Warren (D-MA), Amy Klobuchar (D-MN), Bernie Sanders (I-VT), Jack Reed (D-RI), Tim Kaine (D-VA), Peter Welch (D-VT), and Cory Booker (D-NJ).

The full text of the legislation is available here.

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