Liberal Talk Radio

After Mark Schmitt and Jacqueline Shire mentioned Mike Kinsley’s vicious attack on private equity managers and capital gains, I had to read it myself.

(No easy task, mind you, since the new Time.com site makes it nearly impossible to find what you’re looking for. After bumping around fruitlessly on the Time.com website for 10 minutes, I just went to Google. Fortunately someone blogged about it, otherwise I’d never have found it. It’s baffling how these media folks bash bloggers. Note to the MSM: if it weren’t for bloggers, we’d never find your stuff! But I digress…)

And yes, it’s pretty good:

But why are we even having this discussion? The private-equity gents may truly believe the world is a better place if they pay less in taxes. But they surely know that their case is not obvious or airtight, and it looks just awful. To be specific, they look like pigs. Worse, they look like unpatriotic ingrates who won’t share with their country even a fraction of the blessings that it has bestowed so spectacularly on them.

Maybe these characterizations are unfair. If so, these guys are truly fools. They are trading away something they crave (respectability) for something they have no conceivable use for (more money). They are not fools like the plutocrats who cursed the New Deal while it saved capitalism. American capitalism is in no danger. They are fools who, in search of dignity, give their gangs ludicrous Savile Row names like the Blackstone Group and the Carlyle Group.

I’m really mystified why people who manage these funds get their income treated as capital gains (taxed at 15%) instead of regular income (33%). It’s not their money they’re investing, it’s someone else’s. I used to work in sales, so I know about commissions, which is basically what this is, a commission. If I did well, in a good month I’d make more from commission than from my base pay. But I can never, ever recall the IRS offering to tax my commission check at 15%.

Of course, any attempt to regulate this stuff usually ends up having ridiculous side-effects, as this article, which Kinsley mentions, makes clear. These guys have worked their taxes burden is negative: the IRS pays them.

Flat tax, anyone?