Bad news day today seems to be getting worse. This spring Democrats put forward a proposal to close the Private Equity Firm loophole in the capital gains tax. Today we learn that that measure was quashed thanks to our gutless Senate Democrats.
In today's Washington Post That loophole, which allows equity firm managers to pay the lower 15% carried interest as opposed to the 35% capital gains rate, was to be eliminated in a House proposal by Reps Rangel (D-NY) and Levin (D-Mich). Just to be clear. These are billionares who are right now paying less than most people's income tax. This should be a no brainer. There is no way Democrats are going to capitulate here too, I mean c'mon, right?
Well to anyone who has been paying attention lately, this should come as exactly no shock at all:
Senate Majority Leader Harry M. Reid (D-Nev.) has told private-equity firms in recent weeks that a tax-hike proposal they have spent millions of dollars to defeat will not get through the Senate this year, according to executives and lobbyists.
Billionares: 1
Everyone Else: 0
Oh, and if there is anyone wondering what could have possibly struck fear in to the hearts of our Senate Dems look no further than Mr. 25%:
Bush administration officials have also indicated that they would oppose a tax increase on carried interest.
But... but teh VETO!!!1 /gag