May 21, 2019

Trump still wants to end the carried interest tax break

Illustration: Lazaro Gamio/Axios

President Trump still wants to end the carried interest tax break, in which certain investment managers pay capital gains rates instead of higher ordinary income rates. But don't expect it to happen anytime soon, if at all.

Driving the news: He made the comments to Fox News host Steve Hilton, who noted that then-candidate Trump had once referred to the current system as "getting away with murder." But then things get fuzzy.

  • Trump told Hilton that he used carried interest as a "negotiating chip" during 2017 tax bill negotiations to get corporate rates down to 21%, saying it otherwise would have been "23 or 24%."
  • Gary Cohn, when still Trump's top economic advisor, told Axios that Trump was asking up until the last minute "if we could still get rid of it." So if Trump was using carried interest as a negotiating chip, no one told Trump.

Between the lines: Cohn at the time blamed lobbyist-driven GOP House members from blue states for the pushback, but said nothing about a tit-for-tat on corporate rates (which the GOP caucus seemed to be in agreement on).

  • Probably because the math isn't anywhere near comparable, with even Trump telling Fox that the carried interest change wouldn't generate "that much money" in new federal revenue.

The bottom line: The House is now controlled by Democrats, who are generally more supportive of this change than are Republicans. But there's no obvious mechanism for how it would now get passed. Trump had his chance, but "negotiated" it away.

Go deeper: What taxing "carried interest" means

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Sign of the times: A pro-Warren super PAC

Democratic presidential candidate Sen. Elizabeth Warren at a rally in Nevada. Photo: Alex Wong/Getty Images

A group of women progressives who back Sen. Elizabeth Warren has formed Persist PAC, a super PAC airing pro-Warren ads starting Wednesday in an effort to boost her performance ahead of Saturday's crucial Nevada caucuses, a spokesman told Axios.

Why it matters: Warren has spoken adamantly against the influence of unlimited spending and dark money in politics. But these supporters have concluded that before Warren can reform the system, she must win under the rules that exist — and that whether she likes it or not, their uncoordinated help may be needed to keep her viable through this weekend's contest and into South Carolina and Super Tuesday.

Go deeperArrowUpdated 1 hour ago - Politics & Policy

Pentagon policy chief resigns amid reported discord with Trump

John Rood. Photo: Mark Wilson/Getty Images

John Rood, the Pentagon's top policy official, will resign from his post on Feb. 28, CNN first reported and President Trump confirmed.

The state of play: CNN said Rood "was perceived as not embracing some of the changes in policy the White House and senior Pentagon officials wanted," such as peace talks in Afghanistan with the Taliban and a decision to cut back on military exercises with South Korea as the president courted North Korea's Kim Jong-un.

Coronavirus cases rise, as warnings of global pandemic grow

Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC, and China's NHC; Note: China refers to mainland China and the Diamond Princess is the cruise ship offshore Yokohama, Japan. Map: Danielle Alberti/Axios

We may be "at the brink" of a global pandemic, warns a top U.S. public health official, as cases continue to spread despite containment efforts. Meanwhile, the global economy is being affected, including the tech manufacturing industry.

The big picture: COVID-19 has now killed more than 2,000 people and infected over 75,000 others, mostly in mainland China, where the National Health Commission announced 136 new deaths since Tuesday.

Go deeperArrowUpdated 2 hours ago - Health