Post Carries On about Carried Interest and Tax 'Loophole'
The words ‚Äúlucrative tax break‚ÄĚ or ‚Äúloophole‚ÄĚ conjure up thoughts of dishonesty or underhandedness regarding the tax code. Perhaps that is what the
Calling it the ‚Äúmost controversial tax break on Wall Street,‚ÄĚ the Post promoted the idea of wrongdoing:
‚Äú[It] is not authorized by any law and was never approved by Congress,‚ÄĚ wrote the Post.
‚ÄúWall Street‚Äôs Lucrative Tax Break Is Under Fire‚ÄĚ co-authored by Jeffrey H. Birnbaum and Lori Montgomery suggested a ‚Äúloophole‚ÄĚ in the tax code has been exploited to the detriment of the middle class.
‚ÄúBut at a time of rising income inequality and with Congress engaged in a desperate hunt for cash to expand aid to a disgruntled middle class, the Wall Street money men have become an appealing target for Democratic lawmakers and presidential candidates, who say the financiers are woefully undertaxed,‚ÄĚ wrote Birnbaum and Montgomery.
The National Taxpayers Union shared its opposition to modifying tax codes for ‚Äúthe Carry‚ÄĚ with the
‚ÄúCapital income should be taxed at the lowest possible rate without respect to who the taxpayer is. Characterizing the treatment of capital gains as a loophole for some taxpayers will lead to it being called a loophole for everyone. Any concession to advocates of higher capital gains taxes is therefore more likely to embolden than to appease them.‚ÄĚ
CNBC‚Äôs Lawrence Kudlow has written that changing the tax code would have negative consequences on a stock market. Since Oct. 4, 2002, the Dow Jones Industrial Average has climbed from 7,528 points to 13,178 points on August 3.
‚ÄúIn particular, these willy-nilly changes of the tax rules would have a chilling effect on capital formation, and could constitute the biggest attack on capital since the 1930s,‚ÄĚ wrote Kudlow in his syndicated column on June 28.
‚ÄúEven billionaire Warren E. Buffett, the third-richest person in the world, said it was wrong for him to pay a rate lower than the rate paid by his $60,000-a-year secretary,‚ÄĚ wrote Birnbaum and Montgomery.
But as columnist Larry Elder has shown, that‚Äôs not possible. Even in unusual circumstances assuming she was in the highest of possible tax brackets, the highest percentage she would pay is 25 percent.
The Post mentioned efforts by congressional Democrats to raise the capital gains rate from its current 15 percent to 35 percent.
‚ÄúSeveral key Democrats, led by Rep. Sander M. Levin of
‚ÄúThis is not an administration that‚Äôs predisposed toward tax increases,‚ÄĚ White House Press Secretary Tony Snow told The New York Post on June 27.
The Post buried those who defend the current system until the next to last paragraph.
‚ÄúThe general partner should be treated as the owner-proprietor because he raises the capital from the other partners and controls all decision-making,‚ÄĚ said Jonathan Talisman, representing the Private Equity Council, to the Washington Post. ‚ÄúWe reward this type of entrepreneurial risk-taking and investment in long-lived assets with favorable capital gains treatment.‚ÄĚ
Co-author Lori Montgomery wrote two one-sided stories about the alternative minimum tax for The Washington Post once, including a June 8 story.