The Origin Story of the Carried Interest Tax Deduction (or the Carried Interest Tax Loop): Planet Money : NPR

Digital image courtesy of the Getty Open Content Initiative

Digital image courtesy of the Getty Open Content Initiative

The carried interest tax loophole allows wealthy Americans, such as those in private equity and hedge funds, to evade billions of dollars in taxes each year. It is one of the most controversial features of the U.S. tax system, but it has withstood numerous attempts by both Republicans and Democrats to eliminate the loophole. The most recent attempt, the Inflation Reduction Act, was Last week’s setback.

On today’s show, we travel through history—from the spice ships of medieval Mediterranean ports (like the one in Claude Joseph Vernet’s painting “Calm of a Mediterranean Port”) to the rooms of Wall Street—to explore the origins of one of the most intractable loopholes in the U.S. tax code.

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