Just in case you thought that the “corporate jet owners” were the only ones who are being publicly shamed by the Obama administration for being successful entrepreneurs, it looks like Obama and his buddies at the New York Times are pushing for a second front in the War on Success. In order to raise $20 billion quickly, they’re looking to close the “carried interest loophole” – a “loophole” that allows investors who make long-term risks to carry interest on their loans as long-term capital gains instead of getting taxed on them immediately. Makes sense, right? You make an investment that has a lot of risks but might pay off in the long term, you should be able to structure how you pay taxes on that risk over the long term.
Except that Dems don’t see it that way. You rich, billionaires, you, making investments in corporations, commercial real estate and entrepreneurial ventures: you deserve to be taxed on every red cent you make. Rush Limbaugh explains:
“Obama … has made this official in 2009 budget documents he’s presented that he wants to get rid of the carried interest tax break for hedge funds, private equity groups, and commercial real estate people. …essentially carried interest is profits for original investors in hedge funds, private equity firms, (and) commercial real estate that is at present taxed at capital gains levels, and they want to convert this to ordinary income, which would move it up to about 35 (percent) and then eventually 39.6 if Obama gets his tax increase wish, which would shut down commercial real estate investment.”
Nice. It’s always great when the Administration fails to see beyond the tip of it’s little, socialist nose. Because, as it turns out, punishing people who invest in commercial real estate actually doesn’t punish big Wall Street investors and their corporate jets and their corner offices and their wine and cheese parties. It punishes the little guy. About half of all commercial real estate is owned in partnerships, and according to statistics released by the NAIOP, the industry creates over nine million jobs. Plus, taxing investment into commercial real estate kills other industries – specifically the construction industry which has already declined almost 25%.
Not to mention, common sense should dictate that the last people you should tax in a floundering economy are people who are actually willing to take long term risks in your country. I mean, let’s face it, it’s not like people are scrambling to throw their money around knowing Obama and his buddies are likely to tank the economy even further. They’re even less excited about making money just so they can put it into the extraordinarily capable hands of Congressional Democrats. Taxing carried interest would more than double the tax on people who make long term investments, and would probably drive them to other countries for business ventures – countries like India and China, whose tax rates on these kinds of capital investments would then be much lower.
Definitely seems like a no-brainer. Why sponsor innovation in other countries when you can sponsor it here? Someone might want to ask Barack Obama. Or maybe put it in a book with big print and pictures, because he’s obviously not getting the point. Innovation and entrepreneurialism drives the American economy. It always has. We’ve always been the insane risk takers who move the world forward with our crazy ideas. If no one’s funding our crazy ideas, or risk-taking becomes just too…er….risky, we’ll lose a huge part of the American identity.
Pretty sad, huh?