President Barack Obama took advantage of the time slot before the Super Bowl Sunday night to announce that he intends to increase taxes for alternative investment professionals.
The president told CBS in an interview that he plans to reduce the country’s deficit by raising revenue, which includes “[closing] loopholes and deductions” for hedge fund and private equity managers.
One of the provisions of Obama’s new bill, which was signed into law last month, would treat carried interest - the amount hedge fund and private equity managers make from a firm’s performance - as ordinary income. That means rather than taxing it at the current 15% capital gains rate, the tax rate would go up to as much as 35%, the highest rate for regular income.
Obama also said in the interview that combining smart spending cuts and reforming the country’s healthcare program could also contribute to reducing the country’s deficit.