This is Rich: Defending the 'Carried Interest' Tax Break

Generally, those enjoying the benefit of a flagrantly inequitable provision in the tax code are discreet in their defense of it. Now that legislation to end private equity and other fund managers' carried interest tax break (for an explication of the issue, click here) has been introduced in Congress, some are bravely, if not so discreetly, attempting to defend it. Some amusing examples from the last couple of days --

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    Emanuel Proposes Defunding Part of the OVP

    Rep. Rahm Emanuel (D-IL) is leading a charge to cut funding for the Office of Vice President, in response to arguments the OVP has made that it isn't subject to disclosure requirements that apply to the executive branch. Emmanuel's amendment is such that unless the OVP complies with the requirements, it will lose the funding it gets in the appropriations bill that funds the President's administration, and will only get funding through the appropriations bill that funds legislative branch activities.

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    The Vice President's Budget?

    The Washington Post is running a multi-part series on Vice President Dick Cheney and his impact on federal policies. Today, the series' authors, Jo Becker and Barton Gellman, examine the veep's role in influencing domestic policy. This section about the budget-making process is enlightening:

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    President Follows Shining Path to $933 Bn.

    Threatens Veto of Interior-Environment Bill Yesterday, the administration issued its third veto threat of the appropriations season, this time against H.R. 2643, the House's $27.6 billion Interior-Environment Bill. Again, yesterday's Statement of Administration Policy reflects the administration's aggregate $933 billion discretionary spending topline approach to vetoing spending bills as they make their way through Congress:

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    Admin. Veto Strategy: "Aggregate Topline" Theory

    An Analytic Framework for the FY 2008 Budget Battle

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    The Privatizers Strike Back

    Congress may make a move to strip language that would keep states from privatizing the provision of food stamps. The anti-privatization language, which would go in the Farm Bill, could be struck down despite the massive failure of a scheme to privatize the food stamp system in Texas. Don't the privatizers get it? Government just does things like this better.

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    Commentary: Hamilton's Take on Inequality

    We've put up an analysis of the Hamilton Project's understanding of government and inequality. If you've been tracking our blogging on the subject, the thesis of the paper will come as no surprise: their attitude about government (it's incapable of doing much good) and inequality (it's probably fair and good for everyone, mostly) isn't particularly helpful.

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    Weekend Reading: CBO Testimony on Health Care

    If you read anything policy-related this weekend, make sure it's Peter Orszag's testimony to the Senate Budget Committee. He gives a fair reading of the factors producing the explosion in health care costs.

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    The Budget Battle -- Rhetoric vs. Reality

    With the Bush administration trying to effect a sudden shift from spendthrift to scrooge this budget season, the time is right to sort out fiscal myth from reality. The administration has issued shrill warnings that "the Democrats' budget would lead to spending and tax increases that put economic growth and a balanced budget at risk" (per OMB, June 12). In fact, the administration has demanded an increase in FY 2008 discretionary spending of seven percent over FY 2007; by contrast, the Democrats' proposed increase is a whopping nine percent, as we noted last week.

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    Korb: $60 billion in Defense Waste

    Lawrence Korb, former Reagan administration official and fellow at the Center for American Progress, has a good report out on $60 billion of annual waste in the defense budget.

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