This year’s bipartisan attempt to reform business taxes will not include changes to the taxation on carried interest, House Ways and Means Committee Chairman Paul Ryan (R-Wisc.) stated at a conference Tuesday.
“That is on the individual side of the code, so it’s not something that we’re looking at right now,” Ryan said at the event hosted by the American Institute of Certified Public Accountants, according to Bloomberg. “That’s what we see as a 2017 conversation.”
Ryan’s comments clash with statements made by President Barack Obama just last week. Obama, who has long promised to tax carried interest as ordinary income (at a rate of up to 39.6 percent) instead of its current treatment as capital gains (at a rate of 20 percent), reiterated his commitment to hiking carry tax in a speech at Georgetown University.
“The top 25 hedge fund managers made more than all the kindergarten teachers in the country,” Obama stated. “There’s a fairness issue involved here.”
Democrats and Republicans have battled for years on carried interest, and laws aiming to tax carry as ordinary income have been put forward repeatedly over the past six years, but none have garnered enough support to become law.
In one of her first public appearances since announcing her candidacy for president, Hillary Clinton also targeted fund manager pay as an example of growing income inequality in the US.
“There’s something wrong when hedge fund managers pay lower tax rates than nurses or the truckers that I saw on I-80 as I was driving here over the last two days,” Clinton said during a campaign stop in Iowa last month.
At the conference, Ryan declined to weigh on in whether he thinks the carry tax break should be scrapped, but insisted that it won’t be going anywhere until the individual tax system is revamped (after there’s a new president), according to The Hill.
“The thing that I don’t think we ought to be doing is buying into class warfare,” Ryan said.