Michael Wolraich: How private equity companies are taxed really has nothing to do with how the companies they own are performed or how much money they're going to be investing in a place like Arizona. But of course, Andrew, as you already told us, this loophole looks like it's safe. It's the tax break with nine lives. He says closing the loophole would bring in $14 billion over 10 years that could otherwise be used for social programs and education. "It just creates an even greater sense that the system is rigged," he adds.
Carried interest is a loophole in the United States tax code that has stood out for its egregious unfairness and stunning longevity.
Typically, the richest of the rich pay 40 percent tax on their income. The very narrow, select group that benefits from carried interest pays only 20 percent.
Earlier versions of the Inflation Reduction Act targeted carried interest. But the loophole has survived. Senator Kyrsten Sinema, Democrat of Arizona, demanded her party get rid of efforts to eliminate it in exchange for her support.
How has the carried interest loophole lasted so long despite its obvious unfairness?
Guest: Andrew Ross Sorkin, a columnist for The New York Times and the founder and editor-at-large of DealBook.
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