There’s the Tory tax-cutting rhetoric and then there’s the tax-rising reality: between 2019 and 2024 the Conservatives delivered the largest rise in tax as a share of GDP of any postwar parliament (3.3%, equivalent to more than £3,000 per household). Higher taxes should mean more pressure for fair taxes – to maintain public consent for paying in. Which brings me to the hi-tech-sounding world of “carried interest”. This is the label given to incentive fees paid to private equity fund managers. But too often they aren’t taxed like it: these fees are treated like capital gains (returns on risky investments) rather than what they are, bonuses. This means they are taxed at just 28% thanks to a tax loophole dating back to 1987. In contrast, bankers generally pay 47% tax on their bonuses. We’re not about to get the violins out for the bankers, but this loophole needs closing – something that last week’s Labour manifesto promised to do. There’s more than peanuts at stake here. In 2021-22, private equity managers made carried interest gains of £5bn – so the tax break of pretending this isn’t just normal income was worth nearly £1bn. This isn’t just a UK problem, although the scale of the issue globally is hard to quantify. But by happy coincidence, last week also saw the publication of a paper from the Oxford professor Ludovic Phalippou, which for the first time fills the gap. It shows that a staggering $1tn of gains have been under-taxed this century – creating billionaires galore (especially in the US, where three-quarters of the gains have gone). So if Joe Biden needs some ideas before his own November election, what should he do? Give Rachel Reeves a call. Torsten Bell is Labour’s candidate for Swansea West