Wednesday, 28 September 2016
Last updated 33 min ago
Nov 9 2011 | 11:02am ET
Proving his mastery of a scolding speech, New York City's billionaire mayor yesterday told some of his fellow billionaires that they should be paying much higher taxes.
Michael Bloomberg told a bipartisan forum in Washington that it was time for an end to the "tax loopholes" that allow hedge fund and private equity managers to pay a lower rate on their share of their funds' profits. Under current tax rules, alternative investment managers pay only the 15% capital gains rate on their performance fees, rather than the ordinary income rate, which can be more than twice as high.
Carried-interest was only a small part of Bloomberg's speech chiding both parties for their failure to tackle the U.S.'s soaring deficit. The mayor also called for a reduction in spending on health care and Social Security—measures put forward by a commission named by President Barack Obama—and an end to the tax cuts implemented under President George W. Bush.
"The spending cuts in Simpson-Bowles, plus Clinton-era tax rates, plus closing some tax loopholes and ending wasteful subsidies would save $8 trillion and effectively bring out budget into balance by 2021," Bloomberg said.
"Opponents will yell and scream about taxes and cuts destroying the economy," he added. "But the same people said the same thing in 1993, when President Clinton and Congress adopted those rates as part of a major deficit-reduction plan. And I think everyone would agree that turned out pretty well."
Bloomberg, who has consistently said he will not seek the presidency, urged Obama to veto any bill that extends the Bush tax cuts.