Heavily borrowing from a principle first employed by Willie Sutton, an infamous bank robber, Senate Democrats are pushing through an obscure tax provision that will accomplish pretty much the same goal:  Stealing money from productive members of society because that is where the money is.

The provision is called carried interest, and it is targeted at people who do their business primarily through business partnerships.

I am not in any way an expert on tax law.  It makes my head spin.  The tax code is so intricate, so detailed, so built for those who can afford to hire tax attorneys, that for most normal people, it is well beyond comprehension.

That is why I turn to smart guys like Doug Holtz-Eakin, the former Congressional Budget Office Director, who can help me make sense of what politicians are trying to do to take more money away from taxpayers.  And Doug has put together an illuminating paper on the unintended consequences (or perhaps intended consequences, I can never tell with these Democrats), of the new carried interest tax proposal being currently debating as part of a tax extenders bill that is on the floor of the Senate (http://americanactionforum.org/files/TaxTreatmentCarriedInterest.pdf).  The impact on the economy is most likely going to be negative.  Most who are in partnerships now will likely hire lawyers who will find ways to do business without being subject to this new tax.  Read more...