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Carried Interest Loophole On Chopping Block - YouTube
Channel: MSNBC
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a loophole that trump mnuchin and gary
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come on all said was going to close so
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what is carried interest make the
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argument for me why carried interest
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should be in there because the white
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house just said we wanted it out
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congress wants it in
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oh i can't make that argument i
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advocated strongly to remove the carried
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interest then who wanted it in private
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equity firms who seem to be keeping that
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beautiful loophole carried interest
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that's not being taken away
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after years of talking about it senator
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joe manchin's reconciliation deal might
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finally start to address the carried
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interest loophole but what is carried
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interest carried interest is a share of
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the profits that private equity or hedge
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fund managers take as compensation it's
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a performance fee and under existing law
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this money earned by these executives a
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tiny group of the most highly
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compensated business people on earth
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they get taxed at a capital gains rate
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of just 20 percent why does that matter
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because that is about half the typical
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tax rate of other high income earners
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which is why politicians on both sides
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of the aisle as well as voters who
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actually know what this thing is have
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been demanding it gets changed for years
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and years and tonight like every other
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night i have invited any lawmaker or
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industry executive that supports this
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provision to come on this show and
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explain why but like every other night
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over the last five years absolutely no
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one said yes but former labor secretary
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robert reich did and he joins us now
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mr secretary
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walk us through how egregious this
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loophole is because it's not even like
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it benefits wall street not main street
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this is specifically for the richest
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business people in private equity the
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people who make hundreds of millions of
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dollars a year and until now this
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provision has been privately preserved
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while no one pays attention
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that's right stephanie this is a
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loophole for the super rich the richest
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of the rich and there is no redeeming
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social value there's no argument nobody
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can provide an argument
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and that's why barack obama promised to
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get rid of it and did not because the
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industry has so much power and that's
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why even donald trump promised to get
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rid of this loophole but did not uh and
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joe biden promised it is there in the
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tax code because the private equity
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industry and everybody who is relying on
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this carried interest loophole wants it
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there it is a huge benefit financially
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to them people campaign on it and then
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once elected they hope the general
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population forgets which we do because
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it's obscure but it could bring our
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government over the next decade
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something like 14 billion dollars yet at
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this point joe manchin who wants this to
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be added to this new package
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is heading for a collision course
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against kirsten cinema could this thing
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end up tanking the mansion plan well i
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hope not it would be a
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scandal if it did and a pox on everybody
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involved uh who did not allow this to go
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through i mean kirsten cinema does like
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and is supportive of this loophole i
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don't know why um could it be because
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she has been a big recipient of wall
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street money uh maybe i i i don't want
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to impugn her integrity but there's no
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question that she has got to give way on
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this
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50 votes are necessary democrats every
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democrat in the senate is going to have
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to vote for this huge bill of which a
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part of it is closing this loophole
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but how do democrats and republicans
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move on from this how do they campaign
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in the next election if right out there
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in the open there was the opportunity to
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close it and chris and samuel pearson
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cinema wouldn't do it
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well i think what what basically the
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democrats have to do is put this bill on
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the senate floor and have her vote
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against it uh you know just dare her say
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you know are you really going to hold up
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this entire bill are you really going to
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show the country
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that you are
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there protecting the richest of the rich
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with a loophole that nobody can justify
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well uh maybe that's what's necessary
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maybe that kind of heat would be would
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be enough to do it uh otherwise i don't
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know where the democrats go i suppose i
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mean democrats could uh come up with
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maybe something else to fill this gap
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but it is such an egregious such a
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purposeless
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and such an obvious payoff to wall
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street and to the richest of the rich
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that it's going to be very hard to
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justify one final point
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both democrats and republicans have been
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the recipients of money from private
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equity and hedge funds and from the big
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money behind them
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and so this is a a kind of an equal
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opportunity bribery problem
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well my quick last question then should
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joe manchin walk away from it right 14
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billion dollars is a lot of money but in
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the grand scheme of things
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this reconciliation bill this package
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has a lot more in it a lot of good
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should he lose this if he can't get
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cinema to budge
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uh well he may have to ultimately joe
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manchin though has been standing up
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against this loophole for several years
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uh two years ago his name he was one of
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three senators who put their name on a a
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bill to get rid of this loophole he said
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last week when he advanced this
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particular compromise he said uh i'm
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carried interest has got to be in here
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so he's put a lot of his credibility on
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the line
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imagine your boss was getting taxed just
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20 20 percent
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while you are getting taxed 37
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that's what this is and nobody can
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explain why that's a good idea but if
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they'd like to i'm here every night at
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11. robert thank you so much for joining
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us i appreciate it
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