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Hedge fund bigs don’t need tax breaks

In 2014, the top 25 hedge fund managers made more money than every single kindergarten teacher in America — over 150,000 of them — combined.

By BILL DE BLASIO

The rampant inequality that we face in America is no accident. It is the result of a system that, for too long, has rewarded existing wealth over work.

There is no more striking example of this phenomenon than the disparity between the earnings — and the tax rates — of kindergarten teachers and hedge fund managers.

In 2014, the top 25 hedge fund managers made more money than every single kindergarten teacher in America — over 150,000 of them — combined.

What’s more, because of something called carried interest — a tax loophole that exists only to boost the earnings of hedge fund managers — those 25 people paid a lower tax rate than the average kindergarten teacher. That’s right: 25 individuals — not even enough to fill the seating space in a single New York City subway car — made more than everyone who teaches our youngest learners put together.

If we’re to truly tackle the crisis of income inequality, changing that rule — and investing that money in growing our middle class — is where we must start.

Here in New York City, we’re using every tool at our disposal to help combat income inequality — expanding paid sick leave to 500,000 additional workers, implementing the first rent freeze in city history, building and preserving 200,000 units of affordable housing, expanding after-school programs, and providing high-quality, universal pre-kindergarten to every family.

But we need Washington to do its part, too. Making the federal tax code more progressive will allow us to invest in people who are struggling.

To that end, closing the carried interest loophole is a tenet of The Progressive Agenda to Combat Income Inequality, a 14-point plan introduced by a diverse coalition of progressive leaders in May.

Billionaire hedge fund managers don’t need a tax break, and there is no reason this loophole should exist.

Bill de Blasio is Mayor of New York City. A version of this article was previously published in The Huffington Post.