Ever wonder why millionaires and billionaires have so much money to spend trying to buy elections?
A lot of it comes from gaming the tax code. And one of the most egregious ways the super-rich avoid taxes is called the “carried interest” loophole which lets Wall Street billionaires pay a lower tax rate than millions of teachers and nurses.
Here’s how the loophole works—
Normally, super-rich people pay a top tax rate of 39.6% on their income. But Wall Street hedge fund managers pay 23.8% – nearly half off! – on most of their salary by claiming their job of managing other people’s money makes their pay “investment income.” In other words, their income is treated as “capital gains” on investments, not as earnings derived from their labor.
Closing the carried interest tax loophole could bring in an extra $1.8 billion a year — enough to replace every lead-corroded pipe in Flint, Michigan, or enough to send hundreds of thousands of kids to college. Some estimates project it could bring in 10 times that much!
The Wall Street money managers funding political campaigns have been able to keep this special loophole in place for decades, but things are changing. With a rising public outcry against special treatment for the super-rich, everyone from Bernie Sanders to Hillary Clinton and Elizabeth Warren to Republican Jeb Bush has come out for closing this loophole.
Before elected officials face the voters on Election Day we have a huge opportunity to get members of Congress to come out in favor of the Carried Interest Fairness Act (S.1686 / H.R.2889) to close this egregious tax loophole. You also have an opportunity to ask those candidates running to represent YOU where they stand on eliminating the “carried interest” loophole BEFORE you cast your vote in this election. Hint: There are NO Republican co-sponsors on either bill.
Given that Republican Paul Ryan runs the House, and Republican Mitch McConnell runs the Senate, it’s highly unlikely either leader will bring this bill to the floor for a vote. If you believe this is an important change needing to be made, it’s up to you to take action! Early voting opens on October 22nd and Election Day is November 8, 2016. I plan to cast my ballot on their first day of early voting. How about you?