The Washington Post reported today that Sen. Harry Reid has informed private-equity funds that the Senate will not be closing the obscenely inequitable tax loophole that allows mega-billionaires to be taxed at 15 percent – lower than most working Americans. Harry says there simply isn't time in the busy Senate schedule. Seriously. And the Post points out that if there isn't time in 2007, there almost certainly won't be in 2008 either – "Congress tends to be leery of tax increases in election years."
I'm sure this has nothing whatsoever to do with the private-equity firms and hedge funders putting "more than 20 lobbying firms" to work for them in the Halls of Congress. Nor is Reid's about face a sign of the Wall Street Execs "increasing their campaign donations to members of Congress." It's simply a jam-packed schedule – who has time to address the shafting of revenues for public infrastructure investment? Rebuilding the shredded social contract? funding health care, education, or new sustainable energy programs? Making up for lost revenues due to insane Bush tax cuts?
As I posted previously, this was a litmus test for Democrats – to see whether the party > is capable of truly taking a stand for working people. They have failed it. Rick Perlstein blogged today of Democratic capitulations on this issue and FISA.
Ari Berman noted that Barack Obama – and kudos to him – wasted no time in calling out this bad decision. Within hours, John Edwards had done the same, saying in a released statement, "Incredibly, for an investment of about $6 million dollars in lobbying fees – and another $6 million in political contributions – these elite Wall Street traders preserved a $6 billion tax break for themselves…. We have to end the rigged system in Washington that rewards big corporate interests at the expense of hard-working families."
Certainly Sen. Bernie Sanders gets it. The longtime fighter for a fairer and more decent America told me: "At a time when poverty is increasing, the middle class is shrinking and the distribution of wealth and income is more unequal than at any time since the 1920s, it is imperative that Congress initiate progressive tax reform which asks the rich and large corporations to start paying their fair share of taxes. This tax reform should certainly include raising the tax rate on private-equity firms and hedge funds from the current 15 percent... The American people want us to move this country in a new direction, and progressive tax reform is central to that effort." And Sen. Sherrod Brown is sticking to his principles on this issue too, telling me, "The income tax system should be the same for the trucker from Greenwich, Ohio, making 20 dollars an hour as for the hedge fund manager from Greenwich, Connecticut, making 20 million dollars a year. Carried interest is compensation for managing other people's money, pure and simple. I believe it should be taxed accordingly."
Here's hoping that more Democrats rediscover their spines and tell Harry Reid he's way off on this. Along with the promise to end the war, telling working Americans that they would stand up for them is the reason Dems are in the majority.