Summary of Tax Provisions in Senator Warren’s Private Equity and Carried Interest Bill

On July 19, Senator (and Presidential-hopeful) Elizabeth Warren (D-MA) introduced a comprehensive bill that would significantly raise taxes on investment funds and their advisors. The Stop Wall Street Looting Act, which was introduced with Sens. Tammy Baldwin (D-WI), and Sherrod Brown (D-OH), contains three tax proposals: it would convert capital gains attributable to carried interest to a higher ordinary income rate, similar to the carried interest bills previously introduced by Rep. Pascrell and Senator Baldwin; impose more stringent limitations on interest deductions for leveraged investment funds; and effectively impose a 100 percent surtax on fees paid from target companies to investment advisors.

Presidential candidates Kirsten Gillibrand (D-NY) and Bernie Sanders (I-VT) cosponsored the legislation, and Reps. Mark Pocan (D-WI) and Pramila Jayapal (D-WA) introduced a companion bill in the House.

Although the likelihood of this package becoming law this Congress is low, these policies (and similar proposals) will likely continue to be part of the 2020 campaign conversation.

See the attached document for a detailed summary of the tax proposals included in the Stop Wall Street Looting Act.

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Click here for a link to the Sen. Warren news release and supporting documents.