WASHINGTON Oct 11 Republican presidential
candidate Donald Trump in Sunday's debate reiterated his promise
to kill the "carried interest" tax loophole that benefits hedge
fund managers and others - but his tax plan offers other goodies
to Wall Street financiers, a nonpartisan tax research group said
Trump and Democratic rival Hillary Clinton's tax plans,
which differ greatly, were compared side-by-side in reports by
the Tax Policy Center which focused on carried interest.
The loophole allows financial managers at private equity,
hedge fund and other qualifying firms to pay the tax rate for
capital gains on part of their income instead of the higher
income tax rate.
Clinton would close the loophole with no compensating
benefits for those hit, the center said in a report.
Trump's plan, the center said, would be complicated.
Under his proposal, hedge funds and private equity
partnerships would qualify for a special 15 percent business tax
rate, depending on their size.
That would be well below Trump's proposed income tax rates
and below the rate that funds now pay under carried interest
The Trump campaign had no immediate comment on the report.
"Literally, he is getting rid of carried interest," said
Eric Toder, co-director of the center, which is a collaboration
of the Urban Institute and the Brookings Institution.
"The question is what else is there in the plan that affects
hedge funds, and the reduction in the business income tax rate
to 15 percent gives them a much better deal," Toder said.
That advantage could be canceled out for large investment
fund managers, who would also be subject to a 20 percent
dividend tax under Trump's plan.
But analysts said Trump has not said what constitutes a
Broadly, Trump has said lower business tax rates would
unleash economic and job growth in the United States.
The center's report said Trump's tax plan would reduce
federal tax revenues by $6.2 trillion over a decade. About
three-fourths of the decrease, the center said, would come from
cutting business taxes, including reducing corporate income tax
from 35 percent to 15 percent, and repealing the alternative
minimum tax for wealthy people.
If carried out, Trump's tax cuts would increase budget
deficits if there were no spending cuts, and result in higher
interest rates that could crowd out investment, the report said.
Clinton's plan would increase tax revenues by $1.4 trillion
with nearly all the increase coming from people with incomes in
the highest 1 percent. Her plan would not lower the federal debt
because of spending programs she has proposed, analysts said.
(Editing by Kevin Drawbaugh and Jonathan Oatis)