Biden’s Plan Would Eliminate Private Equity’s Coveted Tax Break

Private equity’s most lucrative tax break is in peril once more.

Included in President Joe Biden’s plan to fund an ambitious expansion in social spending, released Wednesday, is a call on Congress to abolish the preferential treatment given to a key method of compensation for private equity managers.

In addition to salaries, those managers rely especially on a share of the appreciation in the assets they oversee -- known as carried interest. Those profits -- sometimes in the millions of dollars -- have been taxed as capital gains, at a rate much lower than the top marginal income tax ...