Wednesday, October 10, 2007

Summers Time

As all my readers should know by now, I am a conservative. However, there is one liberal I tolerate … and even like … Larry Summers (the former Clinton Treasury Secretary and erstwhile tarred-and-feathered President of Harvard). Mr. Summers was on "KIudlow and Company" (CNBC) the other night and was asked lots of economic questions, most of which answers Larry Kudlow (a conservative) agreed with. The one that caused him some consternation was whether Larry Summers favored the lower (15%) capital gains rate currently in place. He said no, primarily because this lower rate is being corrupted by such things as hedge-fund managers using this lower rate to pay taxes on their multi-million compensation packages (as much as $500 million per year). They claim (and the IRS and most Republican presidential candidates agree) that these pay packages are "return of capital" and not ordinary income. This, of course, is bullshit.

So, the fact that the lower capital gains rate is being so grossly abused, may be the reason that it is killed by the next (Democratic) administration. Why do so many Republicans close ranks around this hedge fund manager capital-gains tax abuse? Could there be such a thing as "knee-jerk" righties?

I have a suggestion -- when President Wright is booted out of Dartmouth for incompetence and alienating the majority of Dartmouth alums, the job should be offered to Larry Summers.

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