Saturday, December 23, 2017


The New York Times reports that the Trump administration tried to get rid of the carried interest loophole, but darn it, the thing somehow survived.
This week, as senior White House officials acclaimed passage of the tax overhaul in Congress, they also expressed one regret: failing to close the so-called carried interest “loophole” that benefits wealthy hedge fund managers and private equity executives. Despite Mr. Trump’s vows to eliminate a tax rule that allows some rich business leaders to pay lower tax rates than their secretaries, the president in this case was no match for the powerful lobbyists protecting the status quo.

“I don’t know what happened,” said Larry Kudlow, the conservative economist who crafted Mr. Trump’s campaign tax plan. “I don’t know how that thing survived,” he said, adding “I’m sure the lobbying was intense.”
Our tough-as-nails master dealmaker president got outplayed by the lobbying community -- somehow!
Gary D. Cohn, the director of the White House’s National Economic Council, ... said opposition from lobbyists and lawmakers on Capitol Hill was intense....

... Mr. Cohn suggested that Mr. Trump had met his match when it came to those carrying water for carried interest.

“The reality of this town is that constituency has a very large presence in the House and the Senate, and they have really strong relationships on both sides of the aisle,” he said.
Yes, there's the message: The loophole survived because it has backing from Democrats as well as Republicans, even though no Democrats had input into the writing of the bill.

Now, here's Trish Reagan of Fox Business Channel proclaiming her outrage at the survival of the loophole. She blames "the swamp." Notice what it consists of:

REGAN: The failure of Washington lawmakers to close a loophole in the tax code that enables a small percentage of Wall Street fat cats to make out like bandits, effectively paying half the income tax they actually should: It's known as the carried interest loophole, and it allows people like this guy, Steve Schwarzman, who made more than four hundred million dollars last year, to pay less tax -- less tax percentage-wise than, say, a New York City cop.

How do you like that? It's because Mr. Schwarzman likes to call his income that he earns from his labor an investment. Well, Mr. Schwarzman, it's not. But no one on Capitol Hill is going to tell you that or call you out, because we can report today that Mr. Steve Schwarzman gave more than three million dollars to -- wait for it -- none other than a Mitch McConnell-linked super PAC fund in 2016. And the private equity industry as a whole donated to 79 percent of all Senate seats. Both sides, everyone! This was a non-partisan issue that year. Both sides of the aisle. So, effectively, what these guys are doing, if Congress didn't make it, quote, legal, would be and should be considered criminal.

So you wonder why no one outside of our president -- who at least at one point in time cared about this issue, about this blatant inequality -- why does no one bother to address it? Because their campaigns are bankrolled by the industry, meaning the swamp is alive and well.
The Bernie-esque passion surprises me, but she's blaming the loophole's survival on the establishment in both parties, and arguing that while Trump may nave been coopted, the good Trump, the one from the campaign, sincerely wanted to fight these swamp dwellers, and would have closed the loophole if the bad Trump hadn't stopped him. Or something like that.

But as the Times story notes, nothing really prevented Trump from demanding an end to the loophole -- all he needed was his iPhone:
... [Financial industry lobbyist Mike] Sommers said that the wild card was the person living in the White House, and that he could never be too sure how things would play out. Mr. Trump made a habit throughout the process of wading into the tax debate through Twitter, sending lawmakers scrambling.

“We of course were concerned about an errant tweet from President Trump on this, or him doing something,” Mr. Sommers said.

In this case, the tweet never came.
Nope. Trump wasn't dragged into the swamp. He's lived there all his life.

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