Billionaire investor Bill Ackman strongly rejected claims that he exploits a controversial tax loophole, engaging in a fiery exchange on X after wealth manager Ross Gerber accused him of paying a lower tax rate than a public school teacher.
The ‘Scam’ Accusation
The public dispute began on March 11 when Gerber targeted Ackman's compensation, specifically a reported $140 million in earnings.
Gerber, the Co-Founder, President, and CEO of Gerber Kawasaki Wealth & Investment Management, alleged that Ackman benefits from the “carried interest” provision, which allows investment managers to treat performance-based pay as long-term capital gains rather than ordinary income.
“One thing that is absurd is Bill Ackman made $140 mil in income last year and paid a lower tax rate than a school teacher in LA due to the hedge fund tax scam called carried interest,” Gerber wrote on X. He demanded that the loophole be stopped and argued Ackman should receive standard W-2 income.
Ackman Fires Back
Ackman quickly dismantled the accusation, unequivocally shutting down the notion that his firm utilizes the controversial tax provision to minimize his tax liabilities.
“This is totally false,” Ackman replied directly to Gerber. “I pay taxes at the highest federal, state, and city rates. Our funds are not structured in a manner to benefit from the lower carried interest rates.”
Undeterred by the denial, Gerber continued to press the issue, questioning the underlying structure of Ackman's LLC distributions. When another user pointed out that Ackman was following the law, Gerber replied, “Yes it’s legal. Thats the problem.”
The Carried Interest Debate
The clash quickly highlighted the ongoing confusion and frustration surrounding U.S. tax brackets. Anthony Pompliano, the founder & CEO of Professional Capital Management, jumped into the thread, arguing that a teacher earning $100,000 and a fund manager using carried interest pay similar tax rates—22% and 20%, respectively.
However, this comparison relies on a common mathematical misconception. While 22% might be a teacher’s highest marginal bracket, their effective tax rate—after standard deductions—is significantly lower, underscoring the systemic differences between ordinary W-2 income and Wall Street capital gains as a deeply contentious flashpoint.
Ackman Files Combined IPOs Of Pershing Square, New Fund
Billionaire investor Bill Ackman‘s Pershing Square filed for U.S. initial public offerings of his hedge fund and a new fund on Tuesday.
After a failed $25 billion plan to list its closed-end fund in 2024, Pershing Square shifted focus to building its stake in Howard Hughes Holdings Inc. (NYSE:HHH).
Meanwhile, Pershing Square has been active in reshaping its portfolio. In the fourth quarter of 2025, the hedge fund took a new stake in Meta Platforms Inc. (NASDAQ:META), increasing its holdings in Amazon.com Inc. (NASDAQ:AMZN) and exiting its position in Chipotle Mexican Grill Inc. (NYSE:CMG).
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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