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Where Populism Ends

Posted in Uncategorized by teslik on October 27, 2007

Robert Reich, Bill Clinton’s labor secretary, blogged this week for the Economist. In this post, he looks at why Democrats don’t create more of a stink about private equity tax rates:

You might think that Democrats would do something about the anomaly in the tax code that treats the earnings of private-equity and hedge-fund managers as capital gains rather than ordinary income, and thereby taxes them at 15%—lower than the tax rate faced by many middle-class Americans. But Senate Democrats recently backed off a proposal to do just that. Why? It turns out that Dems are getting more campaign contributions these days from hedge-fund and private-equity partners than Republicans are getting. They don’t want to bite the hands that feed.

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