Carried interest

Trump is proposing eliminating the tax loop hole called carried interest. This will affect private equity investors in venture capital and hedge funds. A group of wealthy private investors get their money together and form a hedge fund. They use this money to buy businesses with the goal of increasing efficiency and thus profits. They take a 2% fee for doing this but in addition they get a share of the new profits over certain amount. Their share over the threshold amount is 20% and currently if they hold those profits for three years before selling their share, the profit is taxed at capital gains rates. To remove this loop hole means these profits will be taxed as ordinary income rates which for most rich people means paying twice as much tax on the profit.