The “carried interest tax loophole” allows money managers to pay a lower tax rate than ordinary working Americans
Albany, New York – Today, ‘Patriotic Millionaires’ Chair Morris Pearl and a delegation of fellow millionaires will travel to Albany, NY to support legislation that will close the carried interest tax loophole at the state level. Currently the tax loophole provides Wall Street money managers with preferential tax treatment.
“It is unconscionable that the carried interest loophole allows money managers in New York pay a lower tax rate on the income that they earn by investing other people’s money than hard working New Yorkers in every city and town from Plattsburgh to Buffalo,” said Morris Pearl, Chair of the Patriotic Millionaires, “It’s time to close the carried interest loophole and New York has tremendous power to lead the nation towards a more fair and just tax system.”
The Patriotic Millionaires, in their goal of closing the carried interest tax loophole at the federal level, are developing a state-by-state approach for NY, CA, CT, IL, MA, NJ, and PA to close the loophole at the state level, essentially repatriating each state’s share of what would be taxed if Congress took action.
In New York, Assembly members Jeffrion Aubry and Sean Ryan will introduce legislation later today to close the carried interest loophole and allow the state to repatriate the lost federal revenue.
“This loophole is perhaps one of the most egregious examples of corporate welfare that I’ve ever seen,” said Assemblyman Aubry, Speaker Pro Tempore of the NYS Assembly. “You know that there is something seriously wrong with the system when average hardworking New Yorkers—school teachers, firefighters, police officers—pay a higher percentage in taxes than hedge fund millionaires. To allow this kind of scenario to continue without at least attempting to fix it would run afoul of our basic concepts of fundamental fairness. Gridlock in Congress forces NY to step up and correct this inequity. It’s time for hedge fund millionaires to pay their fair share and closing the carried interest tax loophole in NY will require them to do just that.“
With the considerable gridlock at the federal level on nearly every issue facing the American people, the Patriotic Millionaires recognize the power that New York can wield in eliminating the preferential tax treatment that investment fund managers enjoy.
“I am in the hedge fund and private equity business and the carried interest loophole is welfare for the wealthy,” said Patriotic Millionaires Terence Meehan, Chairman of Azimuth Investment Management.
The Patriotic Millionaires are working with allied organizations including Strong Economy for All, The Hedge Clippers, and Citizen Action New York on this state based campaign. The effort is intended to raise the issues of economic inequality and fair-share taxes generally, the need for fairly-derived revenue options for investments in state needs specifically, and to put pressure on Congress from the bottom up to close the loophole nationwide.
“Every year that New York fails to close the carried interest loophole, we lose billions of dollars that could be used to eliminate the funding gap in our neediest school districts, billions of dollars that could be used to restore disastrous cuts to CUNY and SUNY, billions of dollars that could help rebuild our state’s crumbling infrastructure,” said Karen Scharff, Executive Director of Citizen Action of New York. “It’s time to have tax policy that puts working families before hedge fund billionaires.”
Currently, there is proposed federal legislation introduced by Senator Tammy Baldwin (D-WI) and Representative Sandy Levin (D-MI) to close the loophole, yet the Republican controlled Senate and House has yet to bring the bill up for a vote.
About the Patriotic Millionaires
The Patriotic Millionaires are a group of 200 high-net-worth Americans who are committed to building a more prosperous, stable, and inclusive nation. The group focuses on promoting public policy solutions that encourage political equality; guarantee a sustaining wage for working Americans; and ensure that millionaires, billionaires, and corporations pay a greater percentage of taxes.
The Patriotic Millionaires have appeared on hundreds of media outlets here and abroad, including The Daily Show with Jon Stewart, the PBS NewsHour, The New York Times, Washington Post, CNN, MSNBC, Fox News, and many others. PatrioticMillionaires.org
Schedule
11:00am Patriotic Millionaires fly into Albany Airport’s “Million Air” for press gaggle on the tarmac to address the need to raise taxes on wealthy Wall Street money managers after deboarding their private plane. Camera crews welcome.
Address: 16 Jetway Drive, Albany, NY 12211
1:00pm Private Meeting with Speaker Heastie
New York Capital, Room 349
1:30pm Patriotic Millionaire Press Conference on ‘Million Dollar Staircase’: Members of the Patriotic Millionaires along with the bill’s Chief Sponsor Jeffrion Aubry will address questions pertaining to the carried interest tax loophole
2:00pm-4:00pm Media Availability for members of the Patriotic Millionaires
Attendees include:
Morris Pearl currently serves as Chairperson of the Board of The Patriotic Millionaires, a group of 200 high-net-worth Americans who are committed to building a more prosperous, stable, and inclusive nation. The group focuses on promoting public policy solutions that encourage political equality; guarantee a sustaining wage for working Americans; and ensure that millionaires, billionaires, and corporations pay their fair share of taxes.
Previously, Pearl was a managing director at BlackRock, one of the largest investment firms in the world, His work included the Maiden Lane transactions and assessing the government’s potential losses from bank bailouts in the United States and in Europe. Prior to BlackRock, Pearl had a long tenure on Wall Street where he invented some of the securitization technology connecting America’s capital markets to consumers in need of credit. He is a CFA Charter Holder, a member of the CFA Institute, and the New York Society of Securities Analysts. Pearl lives in New York City with his wife Barbara, enjoys spending time with his two adult sons, and riding his bicycle around the city.
Eric Schoenberg is Chairman of CampusWorks, Inc., a provider of technology leadership services to universities and colleges. He is also an Adjunct Associate Professor at the Wharton School of the University of Pennsylvania, where he teaches a class on Family Wealth. Dr. Schoenberg conducts research on the psychology of money and asset market bubbles and has taught behavioral economics, decision making, and leadership at Columbia Business School, NYU’s Stern School of Business, and the Haas Business School of the University of California at Berkeley. Previously, he was Managing Director and Chief Knowledge Officer of Broadview International, a boutique investment bank offering merger and acquisition advisory services to Information Technology companies. Before that, he served as a Foreign Service Officer in the U.S. Department of State. He is a Trustee of the Rubin Museum of Art; an Overseer of the University of Pennsylvania Museum of Anthropology and Archaeology; and Chairman of the Investment Committee of Planned Parenthood of Greater Northern and Central New Jersey.
Leo Hindery Jr. is Managing Partner of InterMedia Partners VII, LP, along with Peter M. Kern.
From 2001 until October 2004, he was the founding Chairman and CEO of The YES Network, the regional television home of the New York Yankees, where he won five executive producer Emmys for outstanding programming. From December 1999 until January 2001, Mr. Hindery was Chairman and Chief Executive Officer of GlobalCenter Inc., a major Internet services company, which was then merged into Exodus Communications, Inc. Until November 1999, Mr. Hindery was President and Chief Executive Officer of AT&T Broadband, which was formed out of the March 1999 merger of Tele-Communications, Inc. (TCI) into AT&T. Mr. Hindery was elected President of TCI and all of its affiliated companies, then the world’s largest cable television system operator and programming entity, in February 1997.
Mr. Hindery has in the past been recognized as International Cable Executive of the Year, Cable Television Operator of the Year, one of Business Week’s “Top 25 Executives of the Year”, and one of the cable industry’s “25 Most Influential Executives Over the Past 25 Years”.
Mr. Hindery is the author of “The Biggest Game of All” (Free Press, 2003) and “It Takes a CEO: It’s Time to Lead With Integrity” (Free Press, 2005).
Mr. Hindery has a Master of Business Administration degree from Stanford University’s Graduate School of Business, and is an undergraduate of Seattle University. Mr. Hindery has received honorary Doctor of Humane Letters degrees from Emerson College and the Rabbinical College of America.
What is the Carried Interest Tax Loophole?
The carried interest tax loophole is a preferential tax treatment that allows for investment fund managers to pay taxes on their income at the lower capital gains rate as opposed to the traditional income tax rate which the rest of American pay. Originally intended to incentivize shipping captains to risk their boat to haul freight, the carried interest rate has been manipulated by lobbyists to include Wall Street investment managers. You can see a full explanation of the issue from PBS NewsHour with Patriotic Millionaires Morris Pearl and Whitney Tilson HERE or read the Patriotic Millionaires guide on carried interest HERE.
Patriotic Millionaires on Carried Interest
Patriotic Millionaires Challenge Private Equity Top Lobbyist To Public Debate
PBS NewsHour: The war over a tax break for hedge funds and money managers
Fox Business: A millionaire’s take on carried interest
The Hill: Millionaires back Dems in call for end to tax ‘loophole’
Op-Ed by Patriotic Millionaires Chairperson Morris Pearl: “What the carried interest tax loophole reveals about our corrupt political system