Democratic presidential candidate Hillary Clinton voiced support for closing the “carried interest loophole” during a speech in New York on Monday, in which she laid out her vision for US economic policy.
“Those at the top have to pay their fair share,” she stated. “That’s why I support the Buffet Rule, which makes sure millionaires do not pay lower rates than their secretaries. I have called for closing the carried interest loophole, that lets wealthy financiers pay an artificially low rate.”
The Buffett Rule, proposed by President Obama in 2011, would apply a minimum tax rate of 30 percent on individuals making more than a million dollars a year.
“Let’s agree that hugely successful companies that benefit from everything that America has to offer, should not be able to game the system and avoid paying their fair share, especially while companies who can’t afford high-priced lawyers and lobbyists end up paying more,” she stated.
In the speech, Clinton also said she would soon announce a plan to reform capital gains taxes, in order to reward longer-term investments and discourage the use of quick trades. Under current law, the top capital gains tax rate on assets held for less than a year is 43.4 percent. That rate drops to 23.8 percent for assets held more than a year.
Additionally, Clinton suggested that she would look for new ways to end tax inversions, a commonly-used tactic in private equity in which domiciles of US companies are shifted abroad in order to take advantage of lower tax rates.
The presidential hopeful has been targeting GP compensation since her early appearances on the campaign trail, often using private equity and hedge fund manager pay as examples of growing income inequality in the US.