The Year in Fiscal Policy...So Far Has Congress made good on its many promises regarding fiscal policy this session? Carried Interest Issue Gathering Momentum in Congress Congress's tax-writing committees have focused increasing attention this summer on a hitherto little-noticed tax preference enjoyed by private equity and other fund managers that allows them to pay capital gains rates (15 percent) on "carried interest" income they are paid to manage investment funds they do not own. This is significantly lower than the income tax rate that would otherwise be assessed, which could be as high as 35 percent. As Congress moves to take action to close this loophole, nonprofit advocacy groups are mobilizing to support a fix to this unfair aspect of the tax code. At the same time, powerful special interests are working to protect this tax break, which affects some of the wealthiest individuals in this country.