the carried interest is paid from which income stream pre or post tax? answer post, ergo those payments have already been taxed at the corporate rate. If the gov wants to let companies pay pretax income to investors, then ok let investors pay personal income tax rates. The disruption that would cause would be huge however.
You don’t understand what carried interest is or how it works, so that is going to make it difficult to explain to you why it is a significant tax loophole that is available to private equity fund managers and not available to anyone else.
Basically it is the compensation that a private equity fund manager receives, but it is taxed as though it were an investment.
Say you were a real estate broker, and you sold a house and instead of being paid a commission in cash, you retained a 3% ownership interest in the house tax free. Then 5 years later the house is sold again, and you get the 3% amount paid in cash now, but it’s only taxed to you, the broker on the previous transaction, at a 15% rate, because it was an investment. You basically never paid any regular income tax on acquiring that asset.
That is how Carried Interest works, and it probably needs to be changed.