©2019 SourceMedia. All rights reserved.

Mnuchin says no plan to change carried interest tax treatment

Treasury Secretary Steven Mnuchin said Wednesday that the administration has no plans to eliminate the preferential tax treatment of carried interest profits, three days after President Donald Trump said he wanted to do just that.

"We’re not doing anything,” Mnuchin told reporters after he finished testifying before the House Financial Services Committee.

“I know that’s something the president is interested in,” Mnuchin said, but said that changing the tax treatment would require legislation.

Treasury Secretary Steven Mnuchin
Steven Mnuchin, U.S. treasury secretary, gestures inside the Press Briefing Room of the White House in Washington, D.C., U.S., on Tuesday, Feb. 14, 2017. With U.S. President Donald Trump's Treasury secretary finally in place, finance chiefs around the world have a direct link into an administration not shy about criticizing foreign currency policies. Photographer: Olivier Douliery/Pool via Bloomberg

Trump was asked in an interview Sunday with Fox News whether he would work toward eliminating the carried interest treatment and said, "I would like to do it, I will do it.” He railed against it during his presidential campaign, saying that “hedge fund guys are getting away with murder.”

While the 2017 tax overhaul placed new curbs on carried interest, it didn’t eliminate its benefits altogether.

Carried interest is an investment manager’s share of profits — typically 20 percent — from a fund, and is taxed at the long-term capital gains rate of 20 percent, instead of the top ordinary income rate of 37 percent. It’s a main source of income for managers at hedge and private equity funds.

"We’ll see," Mnuchin said of fixing the preferential rate. " Maybe during a technical corrections bill, if we ever get something from Congress, we can contemplate it."

Republicans in Congress have expressed little interest in tinkering with the 2017 tax overhaul, their most significant legislative achievement of the Trump administration.