GOP adds new limit on investor 'carried interest' break to tax bill

GOP adds new limit on investor 'carried interest' break to tax bill
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House Ways and Means Chairman Kevin BradyKevin Patrick BradyCapitol Police tribute turns political K Street navigates virtual inauguration week Growing number of lawmakers test positive for COVID-19 after Capitol siege MORE (R-Texas) on Monday offered an amendment to the GOP tax plan that includes a change to the so-called carried interest loophole.
The amendment would increase the holding period for eligible investments to three years, up from one. Earlier in the day, Brady told CNBC that it would increase to two years.
The carried interest loophole refers to the portion of investment fund profits paid to certain fund managers and investors, which are taxed at capital gains, instead of ordinary income tax, rates. 
As a result, the rate can drop from as high as 39.6 percent to as low as 23.8 percent.
Because the loophole tends to benefit the very wealthy, it has been a regular punching bag for politicians on the campaign trail.
By increasing the holding period to three years from one, the amendment seeks to reduce the amount of investment eligible for the lower rate.