A tax loophole made fund managers rich. Closing it may help pay for the climate bill

Tucked inside the sprawling Senate compromise bill for climate change and health care is an effort, years in the making, to close what Democrats say is a loophole that benefits a handful of the richest Americans: the carried interest tax.

The legislative compromise, reached last week by Senate Majority Leader Chuck Schumer and West Virginia Democrat Joe Manchin, could represent the single largest federal clean energy investment in U.S. history.

About $14 billion meant to fund those efforts would come, Democrats say, from a change to the way the U.S. taxes what is called "carried interest," a major way that many fund managers and private equity investors earn their compensation.