It's Time to Close the Carried Interest Loophole

Because of something called carried interest, the top 25 hedge fund mangers paid a lower tax rate than the average kindergarten teacher in 2014. Billionaire hedge fund managers don't need a tax break, and there is no reason this loophole should exist.
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The rampant inequality that we face in America is no accident. It is the result of a system that, for too long, has rewarded existing wealth over work.

There is no more striking example of this phenomenon than the disparity between the earnings -- and the tax rates -- of kindergarten teachers and hedge fund managers.

In 2014, the top 25 hedge fund mangers made more money than every single kindergarten teacher in America -- over 150,000 of them -- combined. That's right: 25 individuals -- not even enough to fill the seating space on a single New York City subway car -- made more than everyone who teaches our youngest learners put together.

What's more, because of something called carried interest -- a tax loophole that exists only to boost the earnings of hedge fund managers -- those 25 people paid a lower tax rate than the average kindergarten teacher.

If we're to truly tackle the crisis of income inequality, changing that rule -- and investing that money in growing our middle class -- is where we must start.

Here in New York City, we're using every tool at our disposal to help combat income inequality -- expanding paid sick leave to 500,000 additional workers, implementing the first rent freeze in city history, building and preserving 200,000 units of affordable housing, expanding after-school programs, and -- as of this week -- providing high-quality, universal pre-kindergarten to every family.

But we need Washington to do its part, too. Making the federal tax code more progressive will allow us to invest in people who are struggling.

To that end, closing the carried interest loophole is a tenet of The Progressive Agenda to Combat Income Inequality, a 14-point plan introduced by a diverse coalition of progressive leaders in May.

Award-winning filmmaker Robert Greenwald, an inaugural signer of The Progressive Agenda, worked with his colleagues at Brave New Films to produce a powerful short documentary about the deeply unfair income and tax law disparities between hedge fund managers and teachers. It is aptly titled Hedge Fund Billionaires vs. Kindergarten Teachers: Whose Side Are You On?

The film explores this issue from many different angles. It features interviews with both respected economists and kindergarten teachers. The video identifies both the macroeconomic problems that the huge gap in wages cause, as well as the human toll paid by teachers and their students. Most important, it proposes a real, concrete solution to the problem: closing the carried interest loophole.

Billionaire hedge fund managers don't need a tax break, and there is no reason this loophole should exist.

Robert and I will be hosting a screening of his film at Pace University in New York City on Thursday, September 10 at 4:30 p.m. The video will also be live-streamed here on The Huffington Post.

Following the screening, Robert and I will join a panel that includes NYC kindergarten teacher Lena Lombardi, and author Lynn Parramore to reflect on the film, what it means for New York City and the country, and how we can work together to end this injustice once and for all.

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