Press Release
April 9, 2025
Lawmakers Have Little to Gain From Altering Taxation of Carried Interest
The Tax Cuts and Jobs Act of 2017 (TCJA) made a series of business tax reforms to boost U.S. competitiveness and economic growth, spur job creation, and increase incomes; the results show the TCJA’s business reforms worked. In a new insight, Director of Fiscal Policy Jordan Haring explains why policymakers should debate how to make the TCJA permanent, consider building on the law’s business tax reforms with additional ones aimed at enhanced fairness, greater simplicity, and rapid economic growth – and not reforms that would undermine U.S. competitiveness and erode the key principles of good tax policy: fairness and efficiency.
She concludes:
There is little to gain from reforming the taxation of carried interest. It would reduce U.S. competitiveness, raise a minimal amount of revenue, and inflict significant damage on the affected areas of the business sector. It would effectively represent a step backward from the success of the business tax reforms in the TCJA.
