Saturday, November 17, 2007

Why Republicans don't shame Democrats into closing hedge fund tax loophole

Democrats should close the "carried interest" loophole that allows hedge fund managers to get taxed at 15% while the rest of us get taxed much higher. Unfortunately, hedge fund managers give a lot of money to Democrats and that buys influence. Matt Yglesias asks why Republicans don't shame Democrats into closing the loophole. It would be a pretty easy way to score some political points and show how the Democrats are in hock to narrow moneyed interests. Kevin Drum responds:

Silly Matt. Virtually every Republican in Congress has signed — using the blood of their first-born child — Grover Norquist's anti-tax pledge. Everyone knows that "closing a loophole" is just crafty liberalspeak for "increasing your taxes," so voting to tax hedge fund managers at normal rates would cause all pledge-abiding members of the GOP caucus to explode. Or, in any case, open them up to Grover Norquist saying mean things about them.

Besides, you know the old saying. "First they came for the hedge fund billionaires, and I didn't speak up because I was not a hedge fund billionaire. Then they came for the trust fund billionaires, and I didn't speak up because I was not a trust fund billionaire. They they came for the real estate billionaires, and I didn't speak up because I was not a real estate billionaire. Then they came for me, and by that time there were no billionaires left to speak up."

One of the more pernicious effects of GOP propaganda is that our politicians have become tax crybabies: in their sissy little minds raising revenue is NEVER a good idea. No matter how big our deficits are, or how important the need, even suggesting that an egregious tax loophole be closed sends Republicans into a Norquist-induced tantrum.

These are often the same people who claim that the United States is in an unprecedented existential struggle for survival against them terr'rrists, who are a greater threat than the Nazis and Soviets put together. But somehow were supposed to fight off this threat for free, or with the money we get from cutting some education and health spending. It's insane. But cognitive dissonance has never stopped these folks.

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