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Hiking the tax on carried interest capital gains is a lose, lose, lose

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Progressive Democrats are doubling down on efforts to raise taxes on a type of capital gain known as carried interest. Hiking the tax rate on this type of capital gain would have devastating effects on investment in U.S. businesses, the job market and the overall economy.

The proposed legislation, re-introduced last month by Sen. Tammy Baldwin, D-Wis., and Rep. Bill Pascrell, D-N.J., would raise the capital gain tax from its current rate of 23.8 percent to 37 percent, the same as the personal income rate. There is a compelling reason, however, that the tax code distinguishes between regular income and capital gains and overlooking that rationale will hurt investment and economic growth.

Carried interest capital gains income are the profits from a long-term partnership formed between individuals with capital and an expert investor. They are indistinguishable from any........

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