Why the Left Hates Private Equity

Matt Lewis
|
Posted: Jul 25, 2007 9:32 AM
Here's yet another proposed Democrat tax increase on "the rich" that hits the little guy and hurts the economy. From Steve Forbes:

Why does Congress think that sharply boosting taxes on private-equity companies will do anything other than stall or disrupt what is clearly a thriving American economy? Make no mistake: The Baucus-Grassley legislation in the Senate and the Levin bill in the House to hike levies on private equity and overhaul the taxation of publicly traded partnerships are dangerous. They will inevitably harm American investors and our overall investment climate.

Congress long ago recognized that innovation and risk-taking are the driving forces behind our economic system, and that's why our system is designed to encourage these activities...

... But there's more: Aside from hurting America's economy, this tax hike is patently unfair. Did you know that the money in Private Equity, Hedge Funds, Mutual Funds etc....is money that someone has already paid federal, state and city taxes on?

So to say that someone is getting an unfair tax break is bs.

Update: One Wall Street insider emails me this: "This is just my opinion - but if they raise taxes on private equity and hedge funds the market would have a huge crash. Private equity speculation and deals has been a big savior for the market in recent months."

(So the answer to "Why the Left hates Private Equity" may be that private equity is good for America and the economy.)