A2 · Pillar A · Revenue Optimization
Capital gains and carried interest
Tax long-term capital gains and qualified dividends at ordinary income rates for taxpayers with AGI above $1 million, while preserving preferential rates for middle-class investors. Eliminate the carried-interest preference for investment-fund managers, taxing such income as ordinary compensation. Phase in over three years.
- 10-year fiscal
- +$320BRevenue
- Implementation
- Years 2–4
- Middle class
- Neutral
- Planetary
- Neutral
$250B–$400B · Medium-High confidence
Applies only above the $1 million AGI threshold.
No material climate effect.
Global precedent
Most OECD jurisdictions tax capital gains and labor income at similar rates above defined thresholds. The United Kingdom modified its analogous carried-interest regime in 2025.
Lead mechanism
Treasury and IRS; Senate Finance; House Ways and Means.
Bipartisan framing
Conservative case
Removes a distortion that favors financial-sector compensation over productive labor.
Progressive case
Eliminates a long-criticized preference disproportionately benefiting the highest-income filers.
Figures in this framework are illustrative directional estimates derived from publicly available data and conventional Congressional Budget Office budget-window logic. They are not official CBO scores. Any provision adopted from this framework would require formal CBO scoring before legislative consideration. This document is a policy white paper, not an introduced bill.