Some analysts have pointed out previously that the plan on Trump’s website would actually benefit investment managers. The Urban-Brookings Tax Policy Center found that under Trump’s plan, “carried interest would be taxed at a much lower rate than under current law.” Alan Viard, a tax policy scholar at the conservative American Enterprise Institute, said of Trump’s proposal: “It’s clearly a tax-rate cut for private equity, hedge funds and venture capital.”

Trump’s 15 percent rate would apply to so-called “pass-through” business structures, including partnerships, limited liability companies and sole proprietorships. For tax purposes, such businesses pass their earnings through to their owners, who then pay tax at rates that reach 39.6 percent under current law.

Saying the current system “stifles small businesses,” the campaign has pitched its 15 percent rate as a boon for them. Trump also has proposed a top income tax rate of 15 percent for large corporations, which currently are subject to a top statutory rate of 35 percent. And he has called for cutting individual income-tax rates across the board as well, taking the top rate from 39.6 to 25 percent.

Debt Increase

While Trump has proposed limiting the value of certain individual tax deductions to help pay for those cuts, various analyses suggest his plan would reduce federal revenue by about $10 trillion over its first decade. While it would improve incentives for U.S. taxpayers to work, save and invest, it could increase the national debt by almost 80 percent of gross domestic product by 2036 unless it’s accompanied by large spending cuts, according to the Tax Policy Center’s analysis.

The broad language of Trump’s proposed 15 percent tax rate for pass-through partners will get investment managers’ attention, said Bill Burnham, the founder of Inductive Capital, a hedge fund and investment firm in Reno, Nevada.

“You can bet your last dollar that every hedge, private-equity and venture-capital fund under the sun would pass through as much income as they could,” Burnham said. But he also said the proposal to treat small businesses the same as giant private-equity and hedge funds “seems like a big loophole that would quickly close at some point.”

Candidates’ Calls

Bashing carried interest emerged as a popular theme in the 2016 presidential campaign. Democrats Hillary Clinton and Senator Bernie Sanders of Vermont joined Trump in calling for its end, as did former Republican contenders Senator Ted Cruz of Texas and Jeb Bush.

Hedge funds, investment pools open only to wealthy investors, engage heavily in short-term trading and tend to have shorter-term gains. That means their carried interest often doesn’t qualify for the 23.8 percent rate, which is reserved for gains on assets held for a year or more. By contrast, private-equity funds put money into longer-term investments.