Pershing Square Capital Management CEO Bill Ackman is backing the closure of a ‘loophole’ that allows private equity and hedge fund managers to reduce the rate of tax they pay on their fund investment profits, according to a report by Fortune.
In the past, billionaire Ackam has himself benefited from the rule that Democrats want to change as part of the $739 billion Inflation Reduction Act of 2022. And while many managers and the MFA have come out in opposition to the change, Ackman has said the current situation is a “stain on the tax code”.
Those in opposition to the change say that the current rules, which allow managers to pay a capital gains tax rate (roughly 20%) on certain earnings rather than a regular income tax rate (typically 37 per cent), serve as an investment incentive that encourages better investment performance.
