Election results may lead to considerable tax law changes for the private equity industry
President-elect Trump’s tax plan includes proposals that, if enacted, could impact the private equity (PE) industry. His proposals would meaningfully reduce federal income tax rates for both individual and business taxpayers. However, his proposals seek to change the taxation of carried interest. The proposals also include a mandatory deemed repatriation of current foreign earnings of US businesses which would be subject to a one-time tax at reduced rates.
Many Republicans, including senior Trump campaign officials, have said that comprehensive tax reform is a key priority, although this will need to be balanced with other policy priorities of the Trump Administration. The private equity industry should pay close attention to tax legislation Congress proposes in 2017, as well as Trump’s fiscal year 2018 budget, which is expected to include more details on his proposals.