Grassroots Leaders and State Legislators Push to Close Carried Interest Loophole in Illinois Following Passage of GOP Tax Bill
Chicago, IL – As Congress continues to pass legislation and policy that is out of line with the values of the American people, states and cities have jumped in to take action to protect their residents, including city and state action around climate change, net neutrality, and sanctuary status. Now that the GOP has passed its tax bill, it is imperative that Illinois take action to protect our residents by passing legislation to close the egregious carried interest loophole at the state level, generating over $1 billion in new revenue in the first year.
The GOP Tax Bill is especially dangerous to states like Illinois, which has already been destabilized by years of budget crisis and whose communities will be further hurt by changes to state and local tax exemptions. State lawmakers must take action to avoid increased taxes and cuts to local services for working families living in our state.
State Representative Emanuel Chris Welch (D-HIllside) explained, “The Republicans in Congress have just given the 1% an early Christmas present. They have chosen to vote for a huge tax break for the wealthy donors to their PACs, instead of protecting the families living in their districts. We cannot afford to repeat that same mistake here in Illinois. We need to act now and pass legislation that requires the wealthy hedge fund managers who exploit the carried interest loophole to pay their fair share.”
The carried interest loophole is a federal tax loophole that benefits a small, but very wealthy and well-connected group of hedge fund and private equity billionaires. The loophole allows wealthy investors to declare their income as carried interest to receive a lower effective tax rate than kindergarten teachers or truck drivers. Although Trump used the carried interest on the campaign trail as an example of a rigged economic system and promised to close it the GOP tax bill fails to close the loophole.
Amisha Patel, Executive Director of Grassroots Collaborative, added, “Legislation to close the carried interest loophole (SB 1719) passed the Illinois Senate last year but didn’t make it to the Governor’s desk, as some legislators wanted to wait for the federal government to act instead. The GOP’s tax bill makes it clear that Trump flat-out lied to the American people when he promised to close the carried interest loophole. It is time for Illinois to step up and take action to close the loophole ourselves. We can’t afford to wait.”