Dems Target Romney Tax Loophole

In a companion piece to my earlier post, Democrats are also looking to close a tax loophole that allows hedge fund managers to avoid paying the standard 35% tax rate on their capital gains, a loophole used by presidential candidate Mitt Romney. The loophole would reduce the deficit by $23 billion over the next ten years.

"Under current tax law, certain kinds of financiers, including private equity investors and some managers of hedge funds, are allowed to treat bonuses like long-term investment income, called carried interest, taxable at the maximum 15 percent capital gains rate. Others have to pay up to 35 percent taxes on their labor income. The cost to the U.S. Treasury is more than $1 billion a year."

Continue reading here.