As the billionaire titans of Wall Street flee the heat of Manhattan for their luxurious summer homes in the Hamptons, it is time to reflect on the cool reality of our tax system. It is unfair. When a woman earning just over $40,000 per year is in a higher tax bracket than millionaire bosses at hedge funds, something is deeply wrong.

There is a movement afoot by these same titans of industry to perpetuate the inequity by moving in on Washington with an army of lobbyists to maintain the tax advantages they currently enjoy and exploit.

Federal lawmakers began taking a close look at the tax breaks enjoyed by the private equity industry this summer after the public offering of a private equity firm, The Blackstone Group. The public offering revealed how an arcane tax loophole allows managers of private equity and hedge funds to escape paying millions in taxes.

They do this by devising ways to make the bulk of their compensation look like capital gains, taking it in the form of a percentage of profits or carried interest. This finagling means they pay tax on most of their compensation at a maximum rate of only 15 percent, instead of the top rate of 35 percent that applies to other compensation.

Outside of the accounting, finance and tax worlds, the phrase "carried interest" means very little. But in terms that resonate with all Americans, it means the super wealthy get away with paying lower tax rates on their compensation than the people who answer their phones and teach their children.

This unfair tax break helps the rich grow richer and it costs the nation billions of dollars of revenue at a time when mothers who can't afford healthcare, adequate nutrition and good quality childcare for their children are told by the administration that the nation can't afford to help them.

In spite of this, Wall Street titans are asking lawmakers to continue their special tax treatment.

Shortly after Blackstone's public offering, lawmakers introduced legislation that would close loopholes and require private equity and hedge fund managers to pay tax on their compensation like everyone else. Not surprisingly, the private equity industry is vigorously opposing the bills. They have hired big-money lobbyists and have made large campaign contributions to members of both parties.

In the press and on Capitol Hill, they have tried to muddle the debate by claiming that carried interest is not compensation. And they're trying to disguise their own financial stake by claiming that making them pay taxes at the same rate as other workers would hurt other workers who have put their retirement money in pension funds. And of course, no campaign would be complete without the hedge fund titans injecting fear into the debate — they claim if their taxes go up, jobs will go down or move offshore. None of these claims holds up.

Denver venture capitalist William Stanfill took on his industry's self-serving claims in testimony to the Senate Finance Committee. "Our earnings are compensation and should be taxed the same as the compensation of everyone else in this country. It is just not fair for teachers and firefighters to subsidize special-interest tax breaks that cost billions of dollars each year."

Speaking from 25 years' experience, Stanfill told the senators, "There has been more than a hint of Chicken Little in the dire predictions of the havoc this tax change will cause. In my judgment, they won't come to pass, any more than the end of the automobile industry which was predicted when seat belts were mandated."

Requiring private equity managers to pay their fair share won't close all the loopholes in the tax code or raise all the revenues needed to address unmet needs. But standing up to the special interests and passing the legislation would be a good start.

Nancy Duff Campbell is co-president of the National Women's Law Center. She wrote this commentary for McClatchy-Tribune News Service.