Conservatives break with GOP leaders on a tax bill

[babylonsister]

http://thehill.com/leading-the-news/conservatives-break-with-gop-leaders-on-a-tax-bill-2007-07-18.html

Conservatives break with GOP leaders on a tax bill
By Jessica Holzer
July 18, 2007

Some prominent conservatives are coming out in favor of a Democratic proposal to raise taxes on the private equity and hedge fund industries, signaling a break with anti-tax groups and Republican lawmakers on the issue.

William A. Niskanen, the chairman of the libertarian Cato Institute and a former member of President Reagan’s Council of Economic Advisors, called the share of investment profits, or “carried interest,” earned by hedge fund and private-equity managers “basically fees for managing other people’s money” and said it should be taxed as ordinary income rather than as a capital gain.

John Chapoton, the Treasury’s former assistant secretary for tax policy under Reagan, called the current treatment of carried interest “a policy mistake”: “It was earned by the work of promoters and it should be taxed as compensation.”

Irwin M. Stelzer, the director of economic policy studies at the right-leaning Hudson Institute, said flatly: “I don’t think there’s an argument on the equality side for the current tax treatment.”

A partisan fight erupted last month after Rep. Sandy Levin (D-Mich.) introduced legislation to raise taxes on carried interest from the capital gains rate of 15 percent to ordinary income rates of as high as 35 percent.

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[JacquesMolay]

1. Use it to pay for health care....

...n/t