GOP vice presidential nominee Paul Ryan declined to say Tuesday whether he and his running mate, Mitt Romney, would seek to close the “carried interest loophole,” the tax code provision that allows some private-equity executives to pay a lower rate on their earnings.
“The 15 percent tax rate on carried interest -- private equity managers, hedge fund managers take advantage of that. Under a Romney-Ryan administration, should they expect that's going to go away?” Bloomberg TV’s Peter Cook asked Ryan in an interview Tuesday morning.“Look, we can get into an arcane argument about the definition of income, but our interest is not taxing capital more,” Ryan responded. “Taxing capital more means less savings in the economy, means less seed corn for small businesses for economic growth or activity. By taxing -- raising the tax rate on capital, you hurt jobs.”
The “arcane argument” that Ryan references, however, is at the heart of the carried interest debate and the GOP vice presidential candidate did not say whether he and Romney believe that the earnings of those financial executives qualify as income or as capital gains.
Earlier this year, it appeared that Romney – who has personally benefited from the carried interest provision – might be open to closing the loophole. But in several interviews since then, the GOP presidential candidate has declined to say.