Senate Democrats are poised to raise taxes on a key source of private-equity managers’ income, capping a 15-year quest to close what many lawmakers see as an egregious gap in the tax code.
The tax increase on carried-interest income, which is tied to the performance of investments when they are sold, had seemed dead until late Wednesday. But then Sens. Joe Manchin (D., W.Va.) and Chuck Schumer (D., N.Y.) included it in a last-minute deal that the Senate could pass as soon as next week. It’s likely to be the only direct tax increase on individuals included in the Democrats’ climate and healthcare legislation.
