Washington, D.C. — Americans for Financial Reform applauds the House Financial Services Committee’s passage of Rep. Maloney’s long-standing bill, the Overdraft Protection Act, which passed by a vote of 27-22.
The 18 organizations urge the Internal Revenue Service (IRS) to prioritize rebuilding its auditing and enforcement capabilities in order to tackle systemic tax abuses, including in particular those by the private equity industry. The private equity industry has generated greater untaxed revenues over the past decades by structuring their funds to avoid taxes and through a strategy of misclassifying certain earnings, exploiting tax loopholes like carried interest, and utilizing complex and opaque business structures to shield earnings from IRS scrutiny. We applaud President Biden’s plans to fund the IRS and tax enforcement more robustly and believe that these needed changes are a strong argument for such additional resources.
The Take On Wall Street campaign, a group of over 50 community groups, unions, consumer advocates and others today called on Senate Finance Committee Chairman Orrin Hatch to adopt tax reform measures that would raise more than $1 trillion in additional revenue, and discourage dangerous Wall Street speculation by requiring the financial services industry to pay its fair share of taxes.
“‘It’s hard to find a more egregious example of Wall Street billionaires rigging the rules for their own advantage than the carried interest loophole,’ said Jon Green, Campaign Manager for the Take on Wall Street campaign. ‘It is an outrageous and unfair benefit for the wealthy and powerful for no reason other than that they are wealthy and powerful. Every member of Congress should stand with Senator Baldwin and Representative Levin in supporting this bill.'”
“What Americans want and will continue to demand is, of course, the exact opposite of what Trump’s tax plan represents. They want to see the loopholes closed and Wall Street paying more, not less. Senator Bernie Sanders and Representative Keith Ellison have proposed a sales tax on Wall Street transactions; that would be a good start. Working families pay taxes when they buy a car or a pair of shoes.”
“[W]ith populist anger aimed at Wall Street during this presidential election season rising, the ‘carried interest loophole,’ which allows the managers of private-equity firms to pay a lower tax rate, is back in the spotlight. ‘This year is just different. There has been a populist surge politically in both parties,’ said Marcus Stanley, policy director for Americans for Financial Reform. ‘Having the wealthiest people in the financial system paying a lower rate than everyone else is even harder to swallow. People realize that it doesn’t have to be like this.'”
“The banks are larger now than they were before the bailouts, and the stench of corruption persists. As Lisa Donner, executive director of Americans for Financial Reform, put it, ‘The tone of the election as reminded many people just how deeply felt the frustration and anger is about the way that Wall Street has shaped the economy in its own interest.’”
AFR sent a letter today to the Treasury Department and the Internal Revenue Service to require alternative asset managers to disclose the amount of carried interest they received in their annual tax filings. The letter states that: “The carried interest tax loophole allows managers of