'Get it done': Democrats want Trump to eliminate Wall Street tax break he's long targeted

[BumRushDaShow]

Source: USA Today

May 19, 2025, 5:07 a.m. ET


WASHINGTON – A group of Democratic senators are calling on President Donald Trump to push congressional Republicans to end a Wall Street tax break he has long had in his sights.

In a letter sent to Trump on May 18 and first obtained by USA TODAY, ten Democratic senators highlighted the president's longstanding interest in eliminating what's known as the "carried interest loophole." It's a tax break that allows venture capital, private equity and hedge fund managers to pay a lower tax rate for certain earnings than they would if it was taxed as regular income.

Investment fund managers pay 23.8% tax on carried interest, which is the profits they make from assets like stocks and bonds. Even though it makes up most of their earnings, it's currently treated as a return on investment rather than typical income, which is taxed at 37% for the country's top earners. Trump campaigned on eliminating the tax break in 2016, telling CBS News that the financiers are "getting away with murder." "A lot of them, it's like they're paper pushers. They make a fortune, they pay no tax. It's ridiculous," he said at the time.

But Trump couldn't get the change included in his 2017 economic legislation, the Tax Cuts and Jobs Act, amid an intense lobbying campaign from the industry and some GOP lawmakers to protect the break. Wall Street voices say the provision allows them to support more jobs and makes them more competitive around the world. Now that Republicans in Congress are crafting a new sweeping tax and spending package, Trump is again pushing congressional leaders to eliminate the carried interest advantage.

Read more: https://www.usatoday.com/story/news/politics/2025/05/19/democrats-trump-carried-interest/83710411007/

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Link to LETTER (PDF) - https://www.warren.senate.gov/imo/media/doc/warren_colleagues_letter_to_trump_recarriedinterestloophole.pdf

[Lovie777]

1. Will not happen.................

[The Roux Comes First]

2. As If!!

Way too practical and sensible, not to mention equitable, for a yam in his soiled undies.

[dutch777]

3. So much could be done with fairer taxation to fix the deficit. Really would like Dems to put out a comprehensive...

...counter proposal to the current House ideas, including this fix. I know, we had ideas in the Harris platform. No one remembers way back then and it was not complete. Use this opportunity to launch new, bigger, better Dem ideas of a fair budget that helps the poor and middle class, more fairly taxes the rich and corporations and provides long term fix for Social Security. Ideas are out there, just not coalesced: Now is a time of opportunity to message Dem ideas and ideals that are better.

1. Remove the earnings cap on Social Security tax.
2. Fix the loophole noted on carried interest.
3. Introduce a small flat tax on large financial or value transfers (say.1/10% on anything under $5 mil and exclude inheritance residential or agriculture real estate transfers to protect farmers).
4. Tax capital gains at higher rate for any business entity and individuals under age 65.
5. Target any tax relief to the poor and the middle class.
6. Fully fund Medicaid.
7. Have a plan that shows measurable decrease to national debt from the plan over time. Shame the Repugs with this.
8. Forget tariffs other than select cases like punishing countries for unfair currency manipulation.

Lots of other ways to be fairer and speak to voter concerns.

[Bayard]

5. Counter proposal

That's a very good idea. Show people who really stands for them, and the country. Your list is a good start.

[Silent Type]

4. It'll "save" about $1.4 Billion a year. Not a lot, but something.

[DJ Synikus Makisimus]

6. So Dems are begging Trump to do something they wouldn't

or couldn't do when they had "control" of both Legislative branches and the Presidency in '21-'23. That sounds kinda desperate and pathetic.

[BumRushDaShow]

7. Back when we had control

"Crypto" was being pummeled by the collapse of FTX, which itself took down a couple regional banks, and caused others to be taken over. E.g., - https://www.democraticunderground.com/10143043488

This OP includes references to a portion of the history of FTX's demise and Bankman-Fried - https://www.democraticunderground.com/10143413279

I have a whole pile of other LBNs on that fiasco, the last one that came up in a search is this - https://www.democraticunderground.com/10143337914

So it wasn't being seriously considered for complete regulatory incorporation until some safeguards could be put into place.