The Mayor of New York City, Mayor Bill de Blasio and the founder of Brave New Films (BNF), Robert Greenwald recently presented a short film, Hedge Fund Billionaires vs. Teachers, that aims to inform the nation of the inequalities in the tax system and the underfunding of the educations system. In addition to highlighting the reasons inequality is destabilizing The United States of America, the short film also questions why kindergarten teachers are paying higher taxes than hedge fund managers when they earn much less.
So why are some of the wealthiest people in the country being taxed less? As outlined in the video, “Hedge fund managers are investors that use high-risk methods such as investing with borrowed money in hopes of realizing large capital gains.” Typically, hedge fund managers avoid these higher taxes by using “The carried interest loophole,” which allows them to treat their income as “capital gains.”
“When you talk about inequality it’s not an abstraction,” said de Blasio. “It’s not an issue of would we like more equality rather than less. Growing inequality undermines our cohesion as a nation… this nation has been strongest when we’ve had greater equality.”
To help highlight the true extent of the current inequality crisis, the filmmakers and the mayor’s Progressive Agenda compared the profits of hedge funds with the underfunding of the education system. In many instances, teachers are even forced to buy school supplies with their own stressed personal funds. As a result, de Blasio’s plans to close the carried-interest loophole.
“When you go into the teaching profession, you go into it to change lives,” said local kindergarten teacher Lena Lombardi. “Not to make money. It has nothing to do with increasing teacher salaries. It has to do with allocating the funds that would be generated from closing the loophole and putting those funds into resources for the schools.”
When explaining the issue, Director Robert Greenwald said, “I think in any society one wants to strive for a system in a way that treats not just the individual — sometimes known as ‘greed’ — but looks at the larger picture. Think about it: Billionaires fighting to keep every nickel, which they don’t need. Their children don’t need, their great-great-grandchildren won’t need, versus where and how that money could be used for the greater good.”
The power to change this pressing issue lies with the IRS—headed by the Secretary of the Treasury. As a result, Hedge Fund Billionaires vs. Teachers is calling on all 2016 presidential candidates to commit to closing the carried interest loophole in their first 100 days.
As reported by Bloomberg, the Treasury Department has determined that if hedge fun mangers were taxed like we tax teachers, we would generate $17.7 billion over a decade.
“If we’re not investing in infrastructure we’re actually stymieing our economic possibilities. Because we won’t ask the rich to pay their fair share, it’s stymieing our growth. There’s a literal cause and effect between the wrong kinds of taxation policies and what we’re not able to do for the good for everyone,” said de Blasio.
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