The White House stated today that a new tax bill will aim to eliminate the "carried interest loophole."
This is a gut punch for anyone in money management (independent sponsors, PE, VC, RE, HFs, etc.). There will be massive lobbying against it, as there was when Senator Sinema caved in 2022.
I want taxes that are low, competitive, and fair. Like most people I don't love the idea of higher taxes, but I am not sure it's unfair. It will become relatively more attractive to deploy capital outside the US (e.g., Singapore, Switzerland) or structure investment via tax havens (e.g., Cayman, BVI), but the political goodwill ("tax the money managers!") and increased tax receipts may justify the potential reduction in competitiveness.
If implemented, it will surely be retroactive for all of 2025. Otherwise, there would be a mad rush to liquidate assets prior to the tax deadline.
