One of the most influential anti-tax lobbyists in Washington said Tuesday that the carried interest tax loophole, which allows hedge fund managers to be taxed at a lower rate for investment income, isn't all that important to him. Grover Norquist, the founder of Americans for Tax Reform, said that while he disagrees with eliminating the tax philosophically, it's not the most important tax fight for him.
"You guys can have carried interest; we’ll take a big cut in the corporate rate, and we’ll call it even,” Mr. Norquist said, referencing Democrats and their focus on the tax loophole, according to the New York Times. “Carried interest doesn’t matter.”
It isn't just Democrats like President Barack Obama who have been calling for the elimination of the loophole. During the run up to the 2016 presidential campaigns, former Florida Gov. Jeb Bush and real estate mogul Donald Trump have both called for the end to the tax exemption. Both of their tax plans put the loophole in their cross hairs.
It has been estimated that taxing hedge fund managers who take advantage of this tax rate could produce an additional $414 million in revenue, according to the Center for Effective Government. That sum could provide unemployment benefits for 26,538 people for a year, provide nutritional assistance for 3.3 million children and put almost 50,000 children in Head Start programs, the Center estimates.
The anti-tax reformer also weighed in Monday on Trump's newly released tax plan, which calls for a corporate tax cut and tax cuts across the personal income spectrum. "This is a pro-growth, Reaganite plan," he told U.S. News. "It's a good plan....It's Republican orthodox with a little twist here and there."
Norquist is well known for his ability to pressure Republican candidates for office to sign pledges that they will not push for or vote on policies that would raise taxes. Kentucky Sen. Rand Paul and Texas Sen. Ted Cruz were the first Republican presidential aspirants this cycle to sign the pledge.