Carried Interest

Carried interest is a money manager’s share of the profits made by investing clients’ money — typically, around 20 percent. If those profits were made on investments held for more than a year, they’d qualify for the long-term capital gains tax rate of 20 percent, instead of the earned income tax rate of nearly 40 percent.  This would apply to both the clients’ share of the profits, and the money manager’s “carried interest” share. Some, like the Private Equity Growth Capital Council, argue that it’s an important driver of economic growth. Huffington Post