More Energy Producers, Small Business Owners, and Policymakers Speak Out Against Carried Interest Tax Hike
Week after week, more local leaders and groups continue to speak out against an over 70% tax hike on carried interest capital gains. From energy producers to housing advocates, leaders are calling on Washington to protect the private investment that improves local communities.
In April, we released our first list of local leaders across America who oppose a tax increase that will destroy jobs, increase the deficit, and discourage energy development. Here’s what more local leaders and workers are now saying:
Energy Producers
- Ron Ness, North Dakota Petroleum Council President, said in a letter to North Dakota members of Congress: “Private investment has long played a foundational role in U.S. energy development. Over the last twelve years, private equity firms invested more than $4.26 billion through 33 deals with North Dakota companies alone on energy projects, which includes investments in oil and gas of nearly $3 billion. This capital directly supports the creation of high-paying jobs, local tax revenue, infrastructure development, and American energy independence. Changing the tax treatment of carried interest would disproportionately burden the very same partnerships that have fueled this growth. Smaller producers without access to public markets rely on these joint ventures to fund operations, navigate price volatility, and invest in new technologies that improve efficiency and reduce environmental impact.”
- Kyle Noyes, President and COO of Texas energy company Grenadier Energy Partners, said: “The issue was addressed in 2017 through meaningful reforms. Revisiting it now – especially in a way that could be applied retroactively – would be a step backward. It would not only penalize our industry – and a company like ours – but send a broader message that long-term investment and entrepreneurship are no longer valued. A retroactive application would punish management teams, like ours, that have worked for years and risked our own dollars and rely on the carried interest portion of our compensation to justify the sacrifices we have made.”
Elected Officials and Conservative Tax Policy Experts
- Kevin Brady, former Republican Congressman from Texas who served as the Chairman of the House Ways & Means Committee, said: “We knew that small businesses require capital – often lots of it – for start-up, survival and growth. So we took action to ensure the tax code continues to incentivize investment in new and existing businesses across America. One of those sources is private equity, whose tax treatment is called carried interest. In 2017 Congress made thoughtful changes such as lengthening the holding period to reward responsible long-term investment while continuing to make crucial capital available to drive small business growth. It worked, and today 85% of all private equity funding is invested in businesses with fewer than 500 employees. Congress got it right and should preserve it and the other key small business tax cuts just as they are.”
- Economist, writer, and former advisor to President Trump, Stephen Moore said: “Now, thanks to the industry’s winning track record in saving companies and jobs and making people rich, Washington thinks they are doing too well and wants to raise the tax rate on the industry by nearly 50%.”
- Former Missouri State Senator Andrew Koenig said:“Our nation’s current approach to carried interest – taxing it as capital gains – has been policy for a century because it plays a vital role in encouraging reinvestment, incentivizing private equity fund managers to look at long-term investment potential instead of focusing on short-term gains. The original Tax Cuts and Jobs Act recognized this, and in the wake of the bill’s passage billions were invested by private equity, with 85% going to small businesses. This funding plays an important role in helping small businesses make the investments they need to grow and thrive, and it is also vital to businesses that are undergoing challenges and need funding to get back on the right track. In the state of Missouri, private equity investments support 299 businesses and 221,000 jobs.”
- Jordan Haring, Director of Fiscal Policy at the American Action Forum said, “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.”
- Thomas Schatz from Citizens Against Government Waste said, “The TCJA set the appropriate rate for carried interest and since then, private equity invested more than $5 trillion into the economy, 85 percent of which was in support of small businesses. If the Carried Interest Fairness Act is signed into law, the U.S. would drop from the third lowest tax rate for carried interest to the third highest rate and there would be a significant chilling effect on investment in American businesses. The Trump administration is reducing regulations, pushing for an extension of the TCJA, and making the government more efficient and less wasteful. It makes no sense to counteract those pro-growth policies by increasing taxes on carried interest.”
- David Timmons, Senior Policy Manager at the National Taxpayer Union said: “Treating carried interest returns as ordinary income would stifle innovation, make housing more expensive, cause the loss of millions of jobs, and reduce income to the federal government. Politicians should wake up and realize the potential costs to their own districts if this wrong-headed proposal passes.”
- Former US Senate aide Bruce Thompson said: “As the report shows, the negative impact of higher taxes on carried interest would be widespread. Private equity and venture capital investments in manufacturing, small businesses, and technology would be reduced. Investment in critical sectors such as infrastructure, AI, and biotech would be affected. A higher tax rate would distort investment incentives, discouraging the investments we need to increase American innovation. It would discourage private investment throughout the economy, reducing jobs and slowing economic growth. This report shows that increasing the tax rate on carried interest is a bad idea, and should be rejected by Congress.”
Real Estate Industry and Home Builders
- Matthew Berger of the National Multifamily Housing Council said, “Housing will become significantly more expensive without this provision…Basically, it is a tool real estate partners use to make sure the economics of the deal work.”
- Ryan McCormick of The Real Estate Roundtable said, “It would especially be felt in projects involving cleaning up contaminated land, building in low-income or neglected neighborhoods and other projects that have more risk but more potential upside.”
Small Businesses
- Idaho investment advisor Brad Christensen said: “Increasing taxes at this pivotal time could jeopardize these companies, potentially leading to an economic slowdown and diminished prospects for future generations.”
- Molly Otter, Founder of Idaho-based Sage Growth Capital said: “Private equity has helped reshape Idaho’s business landscape, helping entrepreneurs turn ideas into thriving enterprises. Without these investments, many of these businesses might never have taken root or scaled to create the thousands of jobs and families they now sustain.”
- The Louisiana Policy Review recently published an article which read: “With the American economy at a pivotal juncture, preservation of the existing carried interest structure is essential to ensuring continued investment in small businesses, innovation, and U.S. global competitiveness.”
- Doug McLinko, Bradford County (PA) Commissioner, said: “I see how important private investment is to the health of our local economy and to the livelihoods of the people who live here. This tax debate offers the opportunity for us to double-down on policies that keep investment here in Pennsylvania. Encouraging private-equity investment will help boost our economy, support well-paying jobs and offer capital to those who need it to continue growing their businesses. Congress should reject efforts to increase this tax on investment.”
- Keith Willard, small business owner in Louisiana, said: “Raising taxes on carried interest would discourage long-term investment and reduce access to the capital that many Louisiana businesses need to grow.”
- Nicholas Edmond, entrepreneur and small business owner in Montana, said: “Carried interest plays a vital role in promoting long-term investments in small businesses, infrastructure, and innovation, which are essential for growth in a rural state like Montana.”
- Shayne Benedetto, a Louisiana small business owner, said: “Increasing taxes on carried interest would discourage long-term investment and reduce access to the capital that many businesses need to expand, hire, and innovate.”
