Presidential hopeful Hillary Clinton, in an op-ed in the New York Times published yesterday that took aim at Wall Street risk-taking, reiterated her intention to reform carried interest taxation.
“I would fight to close the carried interest loophole that gives some fund managers billions of dollars in tax breaks: They should be taxed like every other citizen,” wrote Clinton, who is a candidate for the Democratic Party nomination.
Throughout her campaign, Clinton has been vocal on reforming capital gains tax to discourage quick trades and reward longer-held investments, and eliminating tax inversions that allow US companies to move domicile to take advantage of lower tax rates, as reported by Private Equity International.
In a speech in July laying out her economic plan, Clinton expressed her support for closing the “carried interest loophole” noting that “those at the top have to pay their fair share.”
During that speech, Clinton also reiterated her support for the Buffett Rule that would impose a minimum tax rate of 30 percent on individuals who earn more than $1 million a year.
Clinton’s position is longstanding. In the 2007 presidential election, while she campaigned for the Democratic Party nomination against Barack Obama, Clinton stated that taxing carried interest as capital gains was a “glaring inequality” that she would remedy if elected.
In this week’s NY Times op-ed, Clinton argued for continued financial sector reform to avoid another financial downturn and vowed to “rein in major financial institutions”, proposing a “risk fee” to “discourage the kind of hazardous behaviour that could induce another crisis.”
Clinton wrote: “I would not only veto any legislation that would weaken financial reform, but I would also fight for tough new rules, stronger enforcement and more accountability that go well beyond Dodd-Frank.”
She proposed strengthening oversight of the “shadow banking” sector including hedge funds, investment banks and other non-banking institutions. “We need to tackle excessive risk wherever it lurks, not just in the banks,” she wrote.
Executives at financial institutions need to be more accountable, Clinton wrote, and proposed extending the statute of limitations on financial crimes from five to 10 years, enhancing rewards for whistleblowers, forcing firms to admit wrongdoing as part of settlements, and for fines on companies to “cut” into executive bonuses.