Private equity, taxes, and NPR

Morning Edition ran a piece this morning on tax rates on private equity carry interest. For this not familiar with the term, carry interest is the percentage of investment profits the firms partners keep, typically 20%.

While I'm a fan on NPR, sometimes even NPR falls into the trap of letting the people they are talking prattle on fact free without challenging them. Morning Edition let Representative Eric Cantor prattle on about how the attempt to close this tax loop hole is the first to raising the capital gains tax. Rep Cantor had zero evidence for this claim.

My objection to the taxation of the carry as a capital gain is that the partners of these have zero capital at risk. Modifying the tax code to restrict the capital gains rate to situations where the party claiming rate has capital at risk is an both fair and sensible. I don't support the efforts for a special private equity tax. Private equity managers should be taxed like everyone else.

The point was also made that firms would try to avoid paying tax on the carry as regular income by giving managers shares of stock in the companies they acquire. Fine with me. If the managers don't pay full market value on the stock at acquisition, that's a taxable event at regular income rates. They may do well both from a tax efficiency and an investment point of view with this strategy but they now have capital risk since they would be outright owners of shares.

Another Bush Press Conference

Our idiot presidnet had another press conference today. He surprised by giving the first question to Helen Thomas but then proceeded to answer with same tired talking point he'd been using in his prepared statement. Bush doesn't even appear to have the mental capacity to realize Iraq has descended into sectarian strife and there's nothing that we can do to end it.

According to Bush Al Queda has the attention span of my cat and since we are distracting them in Iraq, the equivalent of a shink object to my cat, they can't possibly launch attacks in the US.

Best question though was whether Bush was "disappoiinted" in the advisor who had leaked Plame's name. He essentially said no and blamed the prosecutor which was a non-sequitor in relation to the questiion. I likled this question because it got to the heart of matter. Bush believed the leak was acceptable conduct. In Bush's world anything that furthers his agenda is acceptable.
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Why I can't stand the right

Salon's Blog Report gives me more exposure than I need to right wing blogs. Every once in awhile a post there catches my eye. Today the Blog Report had
a really sorry rationalization for why Senator David Vitter hiring hookers is ok:

The right typically preaches about the goodness of leading a moral life - they don’t claim to be immune to the temptations of immorality, just that your life is more fulfilling pesonally, professionally, and spiritually if you don’t succumb to them.

This quote embodies everything I can't stand about the right. In the fantasy land of the right, what somebody says is much more important than what they do. Vitter claiming to upload family values is much more significant than his activities with prostitutes. Morality is about saying the right things and condemning others who don't verbally endorse the correct positions.

What I despise about people like Vitter is that their mission in life is to use the coercive power of the government to control how other people live. Vitter is a very vocal supporter of amending the Constitution to ban gay marriage. Apparently, he doesn't believe in respecting laws since hiring prostitutes is illegal outside of Nevada but using the most important legal document in the land to enshrine discrimination against gays and lesbians is the number issue facing America according to Vitter.

I personally do not even care this lowlife was illegally hiring prostitutes as the laws against prostitution are unacceptable abridgment of personal liberty to me. However, his cheating on his wife makes him a lowlife. What makes him absolute scum is his lying about it. In his campaign for the Senate, he repeatably emphasized he'd upload of Louisiana values. Every statement to this effect was a bald face lie as last time I looked nobody claimed cavorting with hookers were Louisiana's values.

This is the key difference between the right-wing and sane, reality based people. In reality, talk is cheap. On the right, talk is everything. In the bizzaro right-wing land, lying, cheating and whoring are ok if you claim to endorse a certain brand of morality without ever walking the walk.