As a presidential candidate, Donald Trump pledged to eliminate a tax provision of special interest to hedge fund managers.
Trump said that under his tax plan, "we will eliminate the carried interest deduction and other special interest loopholes that have been so good for Wall Street investors, and for people like me, but unfair to American workers."
Carried interest refers to the profit earned by the general partner of a private investment fund. That income is treated as a long-term capital gain, which is taxed at a lower rate than ordinary income.
On a number of occasions, Trump has argued that the provision is unfair to American workers. At one point, he said that fund managers were "getting away with murder."
On Dec. 19 and 20, the Senate and the House passed the final version of the tax bill, which will go to the president for his signature. But an elimination of the carried interest provision was not included in the bill.
On the eve of passage, White House chief economic adviser Gary Cohn -- a former senior executive with the Wall Street firm Goldman Sachs -- blamed lawmakers for their willingness to appease lobbyists.
"We would have cut carried interest," Cohn told Axios co-founder Mike Allen. "We probably tried 25 times." But he said the administration "hit opposition in that big white building with the dome at the other end of Pennsylvania Avenue every time we tried. It is just the reality of the political system."
We rate this Promise Broken.