Private equity group defends carried interest break

Following the recent “fiscal cliff” deal, the top tax rate for capital gains is 20 percent, while the ordinary income rate tops out at 39.6 percent.

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Democrats have essentially said that the carried interest break allows for hedge fund managers and private equity executives to get the capital gains rate for managing other people’s money – something they say should be taxed as regular income.

Jay Carney, the White House press secretary, said Tuesday that it was fair to target “hedge fund managers who pay a much lower tax rate through the carried interest provision than average folks who drive a bus or walk the beat in a municipal police department or teach our kids.”