(DAILY BEAST) For years, Democratic elected officials in Washington have been wary of going after Wall Street excesses too hard, lest the deep-pocketed financial industry throw all its resources to Republicans.
This has been especially true of one of the most notorious targets for financial reform: the favorable tax treatment of the outsize compensation earned by partners in private equity firms. Democrats have long spoken out against this so-called carried-interest loophole, yet have often not pushed as hard as they could to change the law, which saves some of the wealthiest people in finance billions of dollars in taxes each year.
All of this explains why the scenario presented by the 2016 election is so surreal. The Democratic presidential nominee, Hillary Clinton, has vowed to close the loophole, saying it’s unfair that the highly compensated money managers who benefit from it “pay lower tax rates than nurses or… truckers.” Clinton recently went even further than President Obama on the issue, saying she would close the loophole through executive action if Congress continued to resist a legislative fix, a step that Obama has shied away from taking.
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