Jon Huntsman, Republican presidential candidate and former Utah governor, is in favour of raising the carried interest tax rate on private fund managers. Huntsman’s stance is a departure from GOP frontrunners Mitt Romney and Rick Perry.
In an interview with CNBC 23 August, Huntsman said he supports “closing loopholes, repealing deductions and ending corporate welfare as part of a comprehensive tax reform plan”.
Huntsman spoke of the quirks in the tax code that allow private equity and hedge fund managers to pay only 15 percent of their income in taxes, rather than the 35 percent they would normally pay. Carried interest qualifies for lower capital gains tax rates of 15 percent (20 percent after 2012).
President Barack Obama also favours executives of private equity firms to pay ordinary income tax rates as high as 35 percent (39.6 percent after 2012) on the profits they receive as compensation.
“If you are a wealthy CEO or a hedge fund manager in America right now, your taxes are lower than they have ever been,” said Obama in a televised news conference in June. “They’re lower than they’ve been since the 1950s. And you can afford it. You’ll still be able to ride on your corporate jet; you’re just going to have to pay a little more.”
Huntsman said he would elaborate further on tax reform in an upcoming economic speech.