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JPMorgan Chase CEO Jamie Dimon said at the Reagan National Economic Forum on Friday that the US should be taxing carried interest, a loophole that has allowed private market investors to benefit from lower taxes.
“We absolutely should be taxing carried interest,” said the biggest US bank’s top boss, adding to President Trump’s recent campaign to close the provision long-cherished by investors.
Dimon suggested that the revenue can be used to double income tax credits for individuals with children, adding that the money will flow directly into the communities.
Carry, which refers to the part of private fund managers’ compensation tied to profits generated, is currently taxed as a long-term capital gain, allowing fund managers to pay lower taxes compared to ordinary income.
Closing the loophole has been a bipartisan issue for over a decade, with successive administrations promising to close the loophole. A 2021 Congressional Budget Office estimates that doing so would raise tax revenue by $14 billion over 10 years.
Private equity and hedge funds have opposed such legislation, saying it could potentially hurt small businesses as well as institutional investors, such as endowments, foundations and pension funds.
Industry groups in February had opposed Trump’s plan to close the lucrative tax workaround.
