This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Over the past year, the issue of the carried interest loophole has caught the public's eye. The loophole is a tax break for fund managers that allows them to pay less on profits earned managing other people's money than regular people pay earning "ordinary income."
Politicians on both the right and the left, from Donald Trump to Hillary Clinton, have called for the loophole's closing. Some estimates state that it could bring as much as $18 billion per year back into federal coffers.
I run hedge funds, so I have benefited from the carried interest loophole. I can say for a fact that it doesn't help society or our economy. Not at all. Why should I pay a lower tax rate than teachers, nurses or policemen?
This line of reasoning is just common sense and accounts for most of the growing rage over carried interest. But the need to close the loophole carries an additional benefit, one that should be brought to the attention of Sen. Orrin Hatch, Utah's senior United States senator and chairman of the Senate Finance Committee.
Hatch and other Republicans regularly campaign on the platform of reducing the deficit, so let's ask the question: What better way do we have to help kick-start the effort to lower the deficit than closing the carried interest loophole?
Hatch has said that waiting for a broad overhaul of the tax code, "Would be a simpler and more effective way to alleviate concerns that some might have," about closing the carried interest tax loophole. But let's be real; that day may never come at least not any time soon, so delaying sounds like a weak excuse. Additionally, this is not a concern "some might have." This is a concern the vast majority of Americans share. Let's not try to minimize it.
Right now, Hatch is in a position to help remedy this situation by immediately calling for an end to the loophole. If Republicans or anyone else say they are for reducing the deficit, they should also be for quickly closing the carried interest loophole. There is no better place to begin.
Art Lipson is the principal of Western Investment LLC based in Salt Lake City and a member of the Patriotic Millionaires.