Steven Mnuchin: Hedge Funds Will Lose Tax Benefits
Speaking at Delivering Alpha, Treasury Secretary Steve Mnuchin said tax reform should get done by the end of the year.
Hedge funds won’t receive the benefit of a carried interest loophole under the tax reform that President Donald Trump is pushing to get done by the end of this year, according to Treasury Secretary Steven Mnuchin.
“The president has been clear that for hedge funds they will not have the benefit of carried interest,” Mnuchin said Tuesday morning at the seventh annual Delivering Alpha conference, hosted by CNBC and Institutional Investor at the Pierre Hotel in New York. “We want to make sure that we encourage jobs.”
So-called carried interest, or the share of profits that private-equity and hedge-fund firms earn from the investments they make, is currently taxed at a lower rate than ordinary income. Mnuchin addressed the loophole while on stage at the conference, referring to tax reform more broadly as his “number one priority.”
The Trump administration missed its original goal of achieving tax reform in August.
“I’m incredibly hopeful we’ll get this done by the end of the year,” Mnuchin said.
Mnuchin, who served as Trump’s finance chairman during his presidential campaign, was sworn in as the 77th Secretary of the Treasury in February. He previously served as chief executive officer of Dune Capital Management, the hedge fund firm he co-founded in 2004.
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Trump has been pushing to slash the federal corporate tax rate – currently as high as 35 percent – to 15 percent. While he may not achieve that large of a reduction, any tax reform would be a “win” for Trump as it hasn’t been done for about three decades, according to Mnuchin.
“We are super focused on tax reform now,” he said.