Is it fair to tax a small, privileged group at one rate and the rest of American taxpayers at a much higher rate?
The federal income tax code is complex and biased, in some cases benefiting a few–mostly those who have friends in Washington D.C. working to their advantage. An example that is gaining ever greater notice is the “carried interest loophole.” It permits private equity fund managers and others (Wall Street financiers) to earn billions of dollars of service income that is taxed at the preferential capital gains tax rate rather than as ordinary income–a much higher rate.
Construction workers, doctors, engineers, lawyers, small business owners, teachers, police officers and everyone else who works for a living pays taxes on their service income at the ordinary income tax rate. The carried interest loophole entitles Wall Street fund managers to a special tax law that permits them to pay taxes at a much lower rate than ordinary Americans.
“Such special treatment is patently unfair, reflects what is wrong with our political system and should be rectified immediately. The rich and powerful must not be allowed to enact laws that benefit themselves at our expense,” urges Utah business executives who comprise Patriotic Millionaires, social issue activists.
Some tax revision advocates focus on changes in capital gains taxes. They believe fairness can best be achieved through taxes on investment. Defenders of the loophole claim because hedge and private equity fund managers are taking substantial risk their returns should be lower taxed.
Fairness is hard to achieve. In lieu of fairness, Horizonte, Salt Lake City School District’s alternative high school and adult education center, offers a new beginning for the formerly unsuccessful, immigrants and refugees. When a high school diploma is achieved, if desired, a privately funded applied tech or college renewable scholarship is available for those who qualify. We’ll overlook unfairness if we have opportunity. That’s Horizonte.