The Daily The Tax Loophole That Won’t Die
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Aug 15, 2022 
Join Andrew Ross Sorkin, New York Times columnist and DealBook founder, as he dissects the enduring and controversial carried interest loophole that allows the wealthy to significantly reduce their tax burdens. He reveals the political maneuvering behind the scenes, including Senator Kyrsten Sinema's pivotal role in protecting this loophole. Sorkin also explores the implications of income inequality and how private equity firms exploit these tax advantages. Discover the resilient defenses against reforms and the challenges inherent in tax equity.
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Carried Interest Tax Loophole
- Carried interest lets some Wall Street elites pay half the typical income tax.
- These individuals, at the highest income levels, pay around 20% instead of the usual 40%.
Capital Gains Tax
- The US tax code has two income tax types: one for labor and one for investments.
- Capital gains taxes on investment profits are lower to encourage economic growth.
Private Equity's Role
- Private equity firms invest pooled money, often buying distressed companies.
- They aim to improve these companies and sell them at a higher price.