President-elect Donald Trump touted his business expertise during the 2016 presidential campaign and promised to get rid of carried interest. If this comes to fruition, what does it mean? The Credit Department found reputable and factual resources to explain how these proposed changes could affect your business and income.

The tax implications are substantial: Capital gains currently carry a tax rate of 23.8 percent, while labor income is taxed at 39.6 percent. Closing the loophole would generate $17 billion in tax revenue over a 10-year period, the Congressional Budget Office has estimated.

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Trump’s Tax-Cut Plans May Draw Congress to Art of the Deal

With Republicans in control of both chambers in Congress, the most urgent question on taxes is how well Trump will work with House Speaker Paul Ryan to enact the deep cuts to individual income-tax rates and the corporate income tax that both favor. The pair had a strained relationship during the campaign.

Source: Bloomberg.com

Trump Tax Plan Would Aid Wall Street Despite Closing Loophole

Under Trump’s proposal, hedge funds and private equity partnerships would qualify for a special 15 percent business tax rate, depending on their size…that would be well below Trump’s proposed top income tax rate of 33 percent and less than the 23.8 percent rate that funds now pay under carried interest rules.

Source: Reuters.com

Who is Trump’s Pick, Steven Mnuchin, and What Does the Treasury Secretary do Anyway? 

President-elect Donald Trump is expected to name Steven Mnuchin as Secretary of the Treasury. The Secretary establishes economic and financial policy for the country – that includes tax policy.

Source: Forbes.com