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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (347962)	9/10/2007 11:25:08 AM
From: Road Walker	Respond to of 1574953

Our view on income inequality: Decoy on tax fairness Mon Sep 10, 12:21 AM ET When we last checked in on the beleaguered billionaires who manage hedge funds and private equity firms, they were fighting the good fight on behalf of the American worker. The money managers were arguing that if they are forced to pay income taxes as others do, the real loser would be the pension funds that finance the retirements of teachers, firefighters and such. Now they'd have you believe they are also fighting for women- and minority-owned businesses. Everyone will benefit, the managers assert, if only Congress rejects a plan to tax their compensation at the top income tax rate of 35%, rather than at the 15% capital gains rate that now benefits them, thanks to a loophole in tax law. Never mind that last year, the income of the top 25 hedge fund managers averaged $560 million. Or that their plea for tax relief proves that greed knows no bounds. You'd think this would be an easy call — a pain-free revenue raiser at a time of massive federal deficits. But in Washington, where well-financed lobbyists hold sway, it is not. This particular assault on the treasury is led by the Private Equity Council, which represents firms such as the Blackstone Group and Kohlberg Kravis Roberts & Co. Its lobbyists apparently concluded that the pension angle alone was not sufficient (perhaps because the main public pension trade association disavowed it). So it did what lobbying organizations tend to do when they are under siege. It created another lobbying group. The Access to Capital Coalition is an archetypal Washington institution: an ad hoc lobby masquerading as a broad-based coalition. Its purpose is to point out that private equity money flows not just to fat cats but also to small businesses, some of which are owned by women and minorities. The fact is, the asset managers want to pay a lower tax rate than middle class Americans, who generally fall into the 25% and 28% brackets, and a much lower rate than other business executives and highly skilled workers, who pay the 35% rate. Taken in a vacuum, tax hikes on businesses can be economically harmful. But Congress would use money collected from the private equity managers to eliminate or reduce the alternative minimum tax, a dreadful levy that grows automatically, ensnares millions of Americans of lesser means and makes long-term planning difficult. Slick lobbying campaigns notwithstanding, this is a trade-off that would make the tax code a little simpler, and a lot fairer. Copyright © 2007 USA TODAY, a division of Gannett Co. Inc.