Money managers and real estate professionals need the tax rule that gives real estate and private equity funds a low tax rate, real estate billionaire Sam Zell told CNBC on Tuesday.
He said "carried interest" rules help maintain healthy profits and encourage long-term investments.
Critics call carried interest a loophole that exacerbates wealth inequality by allowing hedge fund and private equity managers to earn seven-figure salaries. The tax code treats that type of income as long-term capital gains and taxes it at 20 percent, versus 39.6 percent on the highest income bracket.
Closing the carried interest loophole is part of President Barack Obama's current budget proposal and is in a tax code overhaul drafted by Rep, David Camp, R-Mich., last month.