The former hedge-fund manager says the billionaires who lobbied to keep the loophole ought to “be ashamed.”
Stanley Druckenmiller isn’t coming out of retirement, tax break or not.
The GOP’s proposed tax plan keeps the so-called carried-interest loophole that benefits managers of hedge funds and private equity funds. Druckenmiller, who retired from managing money for outsiders seven years ago but still invests his own money, told CNBC in a taped interview aired on Tuesday that he finds this to be “outrageous.”
Carried interest is the money manager’s cut of the fund’s profit. It is taxed at the lower capital gains tax rate, while profit in other professions is taxed at the higher ordinary income rate.
Druckenmiller says the tax proposal is unfair to doctors and lawyers in states where taxes will go up dramatically, while “you have these multi, multibillionaires — with carve-outs — let’s be clear. Carried interest … you’re making money on somebody else’s capital. It’s not on your own. If that’s not income, I don’t know what is.”
President Donald Trump promised during his campaign that he would eliminate this loophole, saying hedge-fund managers were “getting away with murder.” But he has packed his administration with billionaires and former Wall Street executives. The finance industry has pressed hard to preserve carried interest.
“First of all, the billionaires lobbying the congressmen for this ought to be ashamed of themselves because we’re asking doctors and lawyers and other Americans in blue states to take tax increases so we can fund this kind of nonsense,” Druckenmiller told CNBC’s Kelly Evans in the interview airing on “ Closing Bell .”
Asked whether it would be enough to entice him back to the business, Druckenmiller, an avid golfer, said no, “partly ’cause I keep missing putts.”