\"Free Market\" Gems from The New Republic (LC)
 

This from a piece arguing (well, if you can call it that) for more hedge fund regulations:

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Of course, the best argument for repealing this break is that it distorts the economy — in this case, by encouraging people to become fund managers rather than, say, entrepreneurs.

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Yeah. It'd be much easier if the gov't just set a quota at the correct # of fund managers and entrepreneurs.

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quite apart from distributional justice, the break on capital gains interferes with the free market by encouraging investments that people might not otherwise undertake

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Hear that one? Taxes are too LOW for the free market to work properly! We have got it all wrong!

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Re: \"Free Market\" Gems from The New Republic (LC)
 

Closing "loopholes" like this is how the tax code got so ugly in the first place. The way hedge funds make money is basically the definition of capital gains: buying and selling property held for investment.

The part where they call it restoring sanity to the tax code is especially lol.

EDIT: Meh, this isn't exactly right either. Under the general principles of the current tax system, a hedge fund manager's annual 20% commission should indeed be CG, but he should also pay a one-time whammy tax on the value of his 20% interest at ordinary income rates. But this leads to a bunch of practical problems: how do you value the interest, who's going to become a hedge fund manager if they owe a couple hundred million in taxes the day they start their fund, etc.