Hillary Clinton v. Private Equity

Speaking in New Hampshire today, Hillary Clinton took on one of the sacred cows of private equity--the lower rates of taxation that this hot area of finance enjoy. The partners can take their profits as carried interest and pay 15% instead of 35%. "Our tax code should be valuing hard work and helping middle-class and working families get ahead," she said in Keene, N.H.. "It offends our values as a nation when an investment manager making $50 million can pay a lower tax rate on her earned income than a teacher making $50,000 pays on her income." Barack Obama and John Edwards, who worked for Fortress Investments, have called for similar parity.

Hmmm, how will this play with Steve Rattner of Quadrangle, Blair Effron of Centerview Partners and other Clinton backers? Nothing's gonna happen on this until the next president takes office. Despite some rumblings from Barney Frank, there's no way Bush closes this loophole or raises this tax, depending on how you see it. But it almoswt certainly becomes a big deal on January 20, 2009, no matter who takes office. Even Bain Capital alumnus Mitt Romney'll have to think about this as a revenue raiser....

By the way, let me add, as I do often, that my spouse works for Hillary Clinton.