Steve Mnuchin signals higher taxes for hedge funds

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Brendan Mc Dermid | Reuters

In the wide-ranging interview, Mnuchin also offered praise for Federal Reserve Chair Janet Yellen but said she is just one of a number of people President Donald Trump is considering to lead the Fed after Yellen's term expires in February. "And what's more important is making sure we have a competitive field".

"The president reached out to Democrats and showed that he could get things done on a bipartisan basis", Mnuchin said while addressing critics at the Delivering Alpha conference presented by CNBC and Institutional Investor magazine.

"I'm hopeful in these states that taxes don't go up", Mnuchin said.

"Ultimately there's probably compromise to get to the best deal", Short told reporters at an event sponsored by the Christian Science Monitor.

Trump vowed to reduce the corporate tax to 15 percent to attract more companies to do business in the United States. The administration has planned to pass a tax overhaul with only Republican votes.

"The president has made it very clear for hedge funds, they will not have the benefit of carried interest", Mnuchin said.

The Treasury secretary said the administration still wanted the carried interest break to be available to "other entities that create jobs".

Carried interest is the portion of an investment fund's returns that are paid to investment managers. It is taxed at the long-term capital-gains rate of 23.8% compared with a rate of 39.6% assigned to ordinary income.

He said the Trump administration will release a more detailed tax reform plan by the end of September. However, Republican leaders have yet to unveil details of what Trump has called a "massive" tax regime change, including such basic matters as where to set the corporate tax rate and how to set up individual tax brackets.

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