New York Mayor Pushes End To Carried-Interest Loophole

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.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.