House Progressives Unveil 2025 Agenda to Inspire Action for a More Equitable Nation
With more than 100 members, the Congressional Progressive Caucus has a track record of pushing the policy debate towards bold solutions.
Luisa Galvao, Take On Wall Street, and Sequnely Gray, DC Jobs With Justice. Credit: Negin Owliaei.
“All over the city we have huge needs. We need better public transport that works for all of us. We need affordable housing,” said Elizabeth Falcon, speaking into a megaphone in front of the tony downtown Washington, D.C. office building of the Carlyle Group private equity fund.
“But we can’t do those things while these guys are up here making $2 billion a year and paying less on the profits that they make than the folks who are picking up our trash and cleaning our streets and teaching our children.”
Falcon, Executive Director of DC Jobs with Justice, was among leaders of several activist groups, including SPACEs, the Take On Wall Street campaign, and the Patriotic Millionaires, who spoke at a March 23 rally in front of Carlyle’s Pennsylvania Avenue office. Their aim was to hold up the top guys at this fund as prime examples of the need to close a tax loophole that has made obscenely wealthy financial executives even wealthier.
The three Carlyle Group founders — David Rubenstein, William Conway, and Daniel D’Aniello — are each worth $2.8 billion, according to Forbes. They owe a substantial share of their wealth to the “carried interest” loophole, which allows hedge fund and private equity managers to claim most of their income as capital gains rather than ordinary income.
“These guys here and around the country have gotten a break for too long because they have close ties to Congress, and Congress has cut them a deal.”
The top tax rate on capital gains is currently 20 percent (plus a Medicare surtax of 3.8 percent), while the top marginal income tax rate has just dropped from 39.6 to 37 percent.
During his presidential campaign, President Donald Trump pledged to close the carried interest loophole. Instead, the new tax law merely lengthened the holding period for assets that qualify for the favorable capital gains rate from one to three years, and some tax experts fear funds structured as partnerships may be able to get around even this modest change.
“These guys here and around the country have gotten a break for too long because they have close ties to Congress, and Congress has cut them a deal,” said rally speaker David Grosso, an at-large member of the DC Council and the champion of a bill to close the loophole for the District of Columbia.
“I continually am told by my colleagues that there’s not enough money. There’s not enough money for housing, there’s not enough money for the poor, there’s not enough money for healthcare, there’s not enough money for education,” Grosso explained. “What I’ve decided to do is join you in your effort to close the carried interest loophole in order to expand the District of Columbia’s bank accounts to make it possible for us to invest more money in the people.”
Grosso’s bill is similar to proposals now pending in seven states (New York, New Jersey, Connecticut, Illinois, Maryland, California, Rhode Island, and Massachusetts) that would apply surtaxes on “carried interest” income to raise revenue for state and local needs and to address the failure to close the carried interest loophole at the federal level. New Jersey Governor Phil Murphy reiterated his support for such a fix in a March 23 speech.
According to a new report by the Hedge Clippers campaign, such surtaxes could raise as much as $223 million per year in the “DMV” region ($152 million for Washington, D.C., $32 million for Maryland, and $39 million for Virginia). For the seven other states, revenue estimates range from $39 million for Rhode Island to $3.5 billion for Wall Street’s home state of New York.
The Hedge Clippers campaign works to expose the mechanisms hedge funds and billionaires use to influence government and politics. Their new report puts human faces on many of the biggest beneficiaries of the carried interest loophole in the nation’s capital.
While the city is known as a political rather than a financial center, the area is home to not only the Carlyle Group behemoth, but several other major investment funds:
“My family and other families alike want fully funded social services programs that the most vulnerable people in our city need,” Sequnely Gray of DC Jobs With Justice told the rally crowd. “Instead, we’re letting these millionaires and billionaires get away without paying their fair share. But now we have the opportunity to act when Congress won’t.”
by Sarah Anderson
With more than 100 members, the Congressional Progressive Caucus has a track record of pushing the policy debate towards bold solutions.
by Sarah Anderson
When companies are paying their executives more than Uncle Sam, you know we've got a problem.
by Sarah Anderson
/by Scott Klinger
A postal facility in Medford is one of many across the country facing the transfer of processing functions to a regional hub hundreds of miles away.
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