Patriotic Millionaires President: Maryland Must Close “Egregious” Carried Interest Loophole

Loophole allows millionaire fund managers to pay half the tax rate of millions of working people.

Annapolis, MD – Today, the Maryland State Senate Budget and Taxation Committee is holding a hearing for S.B.216, a bill that would recoup some of the costs, at the state level, of the carried interest loophole in the federal tax code. The bill, if passed, would impose a 17 percent surtax on certain types of income earned primarily by investment managers, venture capitalists, and private equity, bringing their total tax bill in line with what it would be if the carried interest loophole were closed on the federal level.

Patriotic Millionaires Founder and President Erica Payne testified in support of SB216, issuing the following statement:

“The carried interest tax loophole mischaracterizes ordinary income as capital gains income, allowing a few thousand fund managers to pay half the tax rate of millions of regular working people. Fund managers and their lobbyists insist they deserve the lower rate because they’re “investing” their time and expertise. Let me be clear. Literally every person who has ever worked is “investing” their time and expertise, that’s what work is.

The privileged few who benefit from this loophole, The Chamber of Commerce, and the American Investment Council want you to believe our state’s economy will go into a freefall if a few dozen people have to pay fair taxes. They are lying, because they are the only ones who stand to lose from closing the carried interest loophole.

Maryland has already taken the important step of taxing capital gains and ordinary income at the same rate at the state level, and we have a thriving economy. By closing this egregious loophole – passing a piece of legislation that on a very basic level simply corrects a mischaracterization of income at the federal level – Maryland could generate as much as $40 million in new revenue.”

For further comments or questions, please contact Fiona McCarthy at fiona@patrioticmillionaires.org.

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About the Patriotic Millionaires

Proud “traitors to their class,” members of the Patriotic Millionaires are high-net worth Americans, business leaders, and investors who are united in their concern about the destabilizing concentration of wealth and power in America. The mission of The Patriotic Millionaires organization is to build a more stable, prosperous, and inclusive nation by promoting public policies based on the “first principles” of equal political representation, a guaranteed living wage for all working citizens, and a fair tax system. You can find out more at https://patrioticmillionaires.org/about/

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