President Obama is taking on Wall Street again.
After sending his 2015 fiscal year budget to Congress, President Obama said he planned to close tax loopholes benefiting the rich.
"Closing tax loopholes that, right now, only benefit the well-off and well-connected," Obama said.
Obama has often called on Congress to close tax loopholes including the carried interest loophole, which he promised to close during his first campaign.
The idea of closing this loophole has appeared in President Obama's budgets over and over, but it never makes it to the final draft.
Erin Burnett thinks the carried interest loophole is "one of the most ridiculous tax loopholes in America."
It has netted billions of dollars for a very select few Americans.
It's the loophole that gives loopholes a bad name, and makes arguments of special treatment hold up.
Burnett explains how it works:
OutFront: Democratic Congressman Brad Sherman - he sits on the House Financial Services Committee. He is also a Certified Public Accountant.
I love it. (Who did the "Happy Money Manager vs Sad Money Manager" graphic?)
Didn't John Mack go to KKR?
This could be an issue the president could act unilaterally. I doubt that he will. You don't want to act like a dictator to your political funding sources.
That is the most misguided explanation of carried interest I've seen in a while. Categorizing private equity partners as money managers is either dishonest, or shows how little you know about private equity. They aren't managing rich guys money. They are investing their money in businesses, that they then run, using their expertise and knowledge. They only get paid if the investors make money, plus some. Unlike ordinary income, private equity payouts are not guaranteed. Comparing the two shows a complete misunderstanding of the business, and its risks.