JPMorgan Chase CEO Jamie Dimon has joined President Donald Trump in calling for the end of the carried interest tax loophole, a move that could have sweeping consequences for commercial real estate and private investment. In an interview with CNBC, Dimon voiced his concerns about domestic policy mismanagement, specifically criticizing the tax provision that allows general partners of private funds to treat a significant portion of their compensation as capital gains rather than ordinary income. “We absolutely should be taxing carried interest,” Dimon said, according to Reuters, suggesting that the estimated $60 billion in additional revenue could be used to double income tax credits for families and communities.
President Trump surprised many in February when he told Republican lawmakers of his renewed push to eliminate the longstanding carried interest tax break, a measure he also targeted during his first term. Critics argue that the provision unfairly benefits wealthy fund managers at the expense of ordinary Americans, while supporters claim it incentivizes long-term investment. Trump has insisted that ending the loophole is essential to extending the 2017 tax cuts, though the 2017 legislation ultimately only lengthened the required holding period for assets from one to three years, rather than abolishing the provision entirely.
Momentum to end the carried interest tax treatment has been building in Congress, with some lawmakers signaling in February that they were open to changing the favored status. The implications for commercial real estate and private investment could be significant. A study released in May by Charles Swenson, a professor at the University of Southern California’s Marshall School of Business, warned that taxing carried interest as ordinary income would reduce incentives for fund managers to invest in longer-term, riskier projects. This shift could push managers toward shorter-term investments or fee-based models, making it more difficult for companies—especially in commercial real estate—to secure financing.
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Swenson’s research projected a contraction in private equity by 3.94% and in venture capital by 2.81%, potentially leading to net federal revenue losses of up to $1.2 billion in the first year and as much as $12.84 billion annually after a decade. The study also estimated up to 1.23 million job losses nationwide, underscoring the far-reaching impact on the broader economy.
While the House has thus far preserved the carried interest tax treatment, the Senate may revisit the issue as it considers its own version of tax legislation. “It is possible that the issue will come up again in the Senate where the budget numbers might make it easier to consider,” Mark Luscombe, principal analyst for Wolters Kluwer’s tax and accounting division, told GlobeSt.com. However, Luscombe noted that President Trump may not be pushing aggressively for its inclusion, raising uncertainty about the provision’s future.
For commercial real estate, the debate over carried interest is more than a political talking point—it is a question that could reshape investment incentives, capital flows, and the industry’s ability to fund new projects. The outcome in Congress will be closely watched by investors, developers, and fund managers alike, as the sector braces for potential changes that could alter the landscape of real estate finance.
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