Mnuchin Says Hedge Funds Will Lose Lower Tax Rates

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Treasury Secretary Steven Mnuchin said the Trump administration is considering plans to backdate changes to the USA tax regime to the start of the year.

Speaking at CNBC's Delivering Alpha Conference, which brings together asset managers and investors, Mnuchin referred to Trump's proposal to tax so-called carried interest like ordinary income instead of at the lower capital gains rate of 20 percent.

"I can't speak to the specifics", he said at the CNBC Institutional Investor Delivering Alpha Conference in NY, when asked about the matter.

Congress and the White House have not yet released a tax overhaul plan but are working this month to prepare legislation.

"The president's been very clear that hedge funds will not have the benefit of carried interest", he said.

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The favorable tax treatment would still be available to other types of companies "that create jobs", he said, though he did not offer details. The Trump administration has made completing a package of tax cuts a top priority, but the task is expected to be complicated by Democratic resistance and a divided Republican party. That would allow them to bypass a Senate filibuster and pass a bill on a partisan basis.

Mnuchin also said he's considering backdating any tax changes to the beginning of the year, which "would be a big boon for the economy".

Republicans aim to overhaul the American tax code but have faced various hurdles in their goal of passing a tax reform bill this year.

"We're going to get this done by the end of the year", Mnuchin said, adding that the Trump administration was "super focused" on the goal after its three-month extension of the debt limit and government funding was approved last Wednesday. "The president wants to increase military spending and that's something he is going to demand for December".

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