DC 37 joined a broad coalition at the state capitol on Tuesday, March 7, to rally in support of expanding the millionaire’s tax and closing a loophole that benefits the financial sector. These are two key measures that would raise billions of dollars in new revenue from the wealthiest New Yorkers.
Hundreds of community, labor, and faith leaders, joined by policy experts, influential advocates, and dozens of state legislators, called for these measures to be added to the state budget.
A new report from the hedge fund watchdog group Hedge Clippers revealed that closing the carried interest loophole would raise at least $3.5 billion in revenue annually. This loophole allows hedge fund and private equity firms to report fees as capital gains rather than ordinary income that is taxed at a higher rate.
A bill to recapture this revenue as ordinary income has strong support in both houses of the state Legislature. It would allow the state to significantly boost annual spending on schools, health care and other essential public services in New York.
“New York is home to a small set of hedge fund and private equity managers who are among the richest human beings on the planet,” according to the Hedge Clippers report. “They’re benefiting from an unfair tax loophole that lets them avoid their fair share of taxes, while regular working people pay proper tax rates on their income, their property and their consumer purchases.”
“Here in New York, the average income of the 1 percent is nearly 50 times greater than the average income of the bottom 99 percent, ” said DC 37 Executive Director Henry Garrido.”We know the economic hardships that so many New Yorkers now face as they try to get proper care for their families, for themselves. And since the Great Recession, practically all the economic gains have gone to those at the top of the income scale.
“Well, there’s a bill that comes with that incredible disparity. It is a bill of conscience as much as anything else – top wage earners should pay their fair share. We thank Governor Cuomo for his commitment to extend the millionaire’s tax. And we agree with the Assembly that it can be expanded to help those who have been left behind in this economy of inequality, to help them get the vital health care services they need,” Garrido said.
“An economy that gives tax breaks to the super rich and extracts the most from the poor and middle class will never work,” said Citizen Action Executive Director, Karen Scharff. “It’s time for the leaders in Albany to reject the cycle of economic unfairness and support fair-share taxes on the super-rich in this year’s state budget.”
“There’s a choice to be made this year – providing tax breaks to millionaires or funding public education and supporting middle-class families,” said NYSUT President Karen E. Magee. “By extending and expanding the surcharge on the state’s highest earners and closing the carried interest loophole, the state can gain billions of dollars in new revenue to fund public education and health care.”
Dozens of Assembly members attended the rally. In addition to DC 37 and NYSUT, the United Federation of Teachers, SEIU 1199 United Healthcare Workers East, District Council 37, New York State Nurses Association, Professional Staff Congress-CUNY also attended the rally.
Also participating were Citizen Action of New York, New York Communities for Change, Make the Road New York, Alliance for Quality Education, VOCAL-NY, the Labor-Religion Coalition, New York State Council of Churches, Strong Economy for All Coalition, Fiscal Policy Institute, and the Working Families Party.
On Tuesday, Garrido discussed the millionaire’s tax and carried interest loophole on the Time-Warner show “Capital Tonight,” which airs in the Albany area.