"Closing a Loophole Within a Loophole, While Leaving the Larger Loophole Open"

This morning, in response to the news that Treasury Secretary Mnuchin plans to close the unintended loophole that allowed hedge-fund managers to form S-corporations in order to avoid new time restrictions on carried interest, the Patriotic Millionaires issued the following statement:

"We'd like to congratulate Secretary Mnuchin on finally learning how to recognize a loophole when he sees one. Now that he's developed this critical skill, we eagerly await his announcement that the administration will push for the full closure of the carried interest loophole, one of the most egregiously unfair loopholes within our tax code. It must be coming soon, because otherwise it would be absurd to announce that you're closing a loophole within a loophole, while leaving the larger loophole open.

The difference between one year and three years is negligible, because most of the people taking advantage of carried interest were already holding their earnings for longer than three years anyway. Mnuchin's change may keep a few hedge fund managers from further abusing this loophole, but it does nothing to address the vast majority of tax evasion that the carried interest loopholes allows for. The changes in the GOP tax bill to extend the time restriction to three years not only did little to shrink the abuse of the carried interest loophole, it actually made it worse by enshrining within our law that fund managers are entitled to pay lower tax rates than everyone else."

To schedule an interview or for further comment, please contact Sam Quigley at sam@patrioticmillionaires.org.