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Take Back Our Economy: Closing a Tax Loophole on Big Business

July 22, 2008



On July 17, over one thousand union members gathered in Manhattan, joining more than a dozen coordinated events worldwide, for a “Take Back the Economy” protest calling attention to preferential tax treatments for corporations and the mishandling and questionable ethics related to the investment of employee pension funds by private equity firms. The rally was organized by SEIU 1199, SEIU 32B-J, and the Working Families Party.

Over the last 30 years, our state’s tax code has been more and more tilted against middle-class New Yorkers and in favor of big corporations and the very wealthy. While the well-off exploit tax loopholes and benefit from low rates, working New Yorkers are forced to pay more through rising property taxes, sales taxes and user fees that many don’t consider taxes (but should), such as rising subway and bus fares.

With the economic problems our country is facing, tax cuts for the rich and for certain big businesses leave us with ever-growing budget gaps – billions of dollars’ worth – in necessary areas like school funding, health, and public transportation infrastructure.

Something has to give.

One of the ways that I am working to address this is through a bill that I introduced last month with the support of the Working Families Party. My bill would close a tax loophole that allows managers in private equity and hedge funds to avoid paying millions of dollars in taxes resulting from “carried interest.” The loophole unfairly allows these major financial engines to avoid taxes that small businesses have to pay under the Unincorporated Business tax laws of New York.

The Fiscal Policy Institute issued a report on April 15th that found that closing this loophole would generate between $165-225 million every year in revenue for New York City. The Executive Director of the Working Families Party, Dan Cantor, wrote an excellent piece for the Gotham Gazette that explains how the tax loophole works and how it is costing City taxpayers money (“Where The City Can Find $200 Million”). It is wrong that these multi-million dollar companies continue to get away with avoiding paying the same taxes as small businesses, especially when middle-class New Yorkers are struggling in a bad economy.

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Written by Micah · Filed Under Albany Report, Blogroll, Legislative Updates 

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