AIC Issues Statement on Recently Introduced Carried Interest Legislation
WASHINGTON, D.C. – Today, American Investment Council President and CEO Drew Maloney issued the following statement regarding legislation proposed by Sen. Tammy Baldwin (D-WI) and Rep. Bill Pascrell (D-NJ) that would change the treatment of carried interest in the tax code:
“Sen. Baldwin and Rep. Pascrell’s discriminatory tax increase has been rejected repeatedly by economists, tax experts, and bipartisan congresses. This bill is a direct assault on capital gains treatment. It would unnecessarily harm entrepreneurs, business owners, endowments, pension funds, and American workers in every state and congressional district in the country.”
Additional Background Points:
There are more than 4,700 U.S. private equity firms with investments in approximately 32,000 American businesses that employ 4.9 million people. From 2012-2017, U.S. private equity firms invested $3 trillion into American companies.
In New Jersey alone, private equity has invested more than $81 billion from 2012-2017, supporting 740 companies operating in the Garden State. Private equity consistently delivers the strongest returns for public pension funds, including a 14.97 percent return for the generations of workers and retirees currently invested in the New Jersey Pension Fund.
Private equity supports the jobs of 50,000 of Sen. Baldwin’s constituents in Wisconsin and invested more than $47 billion in Wisconsin businesses from 2012-2017. The Wisconsin Retirement System public pension fund was buoyed by private equity investment, which returned 15.5 percent in 2017.
Congress addressed carried interest in the 2017 Tax Cuts and Jobs Act to protect long-term investment. The change required investors to invest in capital assets for more than three years before receiving long-term capital gains treatment.