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Press Release - Hillary Clinton Proposes Ending Unfair Tax Breaks for Wall Street Investment Managers

July 13, 2007

Hillary Clinton today announced her support for cracking down on the tax loophole that allows some Wall Street investment managers to pay dramatically lower tax rates on their income than those paid by average working Americans. Current tax laws allow investment managers in certain partnerships to take large amounts of their compensation in the form of "carried interest," which is taxed at the low 15% capital gains rate, rather than at income tax rates as high as 35%. Many finance and tax experts, including billionaire financier Warren Buffett, have raised concerns that carried interest is essentially earned income. Therefore, it should be taxed as ordinary income, just like the earnings of average American workers.

Hillary's economic vision focuses on shared prosperity in the face of rising economic inequality in our country. A key element of her economic agenda is tax fairness that rewards work, not just wealth. Speaking at a rally in Keene, New Hampshire, on her Ready for Change, Ready to Lead tour, Clinton said that the preferential tax treatment of carried interest presents a "glaring inequity" that must be addressed to restore fairness to our nation's tax system.

"Our tax code should be valuing hard work and helping middle class and working families get ahead," Clinton said. "It offends our values as a nation when an investment manager making $50 million can pay a lower tax rate on her earned income than a teacher making $50,000 pays on her income. As President I will reform our tax code to ensure that the carried interest earned by some multi-millionaire Wall Street managers is recognized for what it is: ordinary income that should be taxed at ordinary income tax rates."

"Don't get me wrong," Clinton continued, "private equity and venture capital play important roles in our economy, and we should continue to support the entrepreneurial spirit that makes America great. We can close this loophole that unfairly benefits some of the best paid people in America, while continuing to encourage investment in innovative, young companies. This is common-sense, pro-fairness tax reform. And I would use the funds generated by the change-which some have estimated at $4-$6 billion per year-to invest in our middle class and working families. These funds can provide a down payment to help make college more affordable, provide tax relief for hard working Americans, and meet other key priorities to promote shared prosperity in America."

Hillary Clinton, Press Release - Hillary Clinton Proposes Ending Unfair Tax Breaks for Wall Street Investment Managers Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/297279

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