Carried Interest Fairness Act of 2025

# Carried Interest Fairness Act of 2025 - Plain Language Summary **What the Bill Would Do:** This bill would change how investment fund managers are taxed on their earnings. Currently, investment professionals at private equity firms, hedge funds, and similar investment companies can treat a portion of their compensation (called "carried interest") as capital gains, which are taxed at lower rates than ordinary income. This bill would require that compensation to be taxed as ordinary income instead, resulting in higher taxes for these investment professionals. **Who It Affects:** The bill primarily affects managers and partners at private equity firms, hedge funds, venture capital companies, and other investment funds.

It could indirectly affect investors in these funds if managers pass costs along, though the bill's sponsors argue it promotes tax fairness. General workers and small business owners would not be directly affected. **Current Status:** The bill was introduced in the 119th Congress by Representative Marie Gluesenkamp Perez (D-WA) and is currently in committee, meaning it has not yet been debated or voted on by the full House. This is a preliminary stage, and many bills in committee do not advance further.