My column last week criticizes ABC's Charlie Gibson for using his position as debate moderator to focus the presidential discourse on the supposed unfairness of asking very wealthy people to pay the same tax rate on their stock profits as their servants pay on hard earned wages. Gibson led us to believe raising the capital gains tax rate would severely harm most Americans, when the hard data shows that the richest 1 percent pays most of this tax (not surprising, considering the richest 1 percent own most of the stock).
So what should Gibson have asked when it comes to capital gains taxes? How about asking the candidates whether they are serious about ending the situation whereby their wealthy donors in the private equity industry are being allowed to bilk American taxpayers?
Specifically, these private equity billionaires are permitted to declare their seven and eight-figure incomes as capital gains, thereby avoiding the standard income tax rates the rest of us have to pay. As you can see at Brave New Films' terrific War on Greed website, private equity sharks like Henry Kravis (who I've written a column about before) are being allowed to avoid the tax rates the rest of the country has to pay - at a huge cost to the federal treasury (ie. schools, roads, bridges, health care, etc.).
This kind of question would truly make the Democratic candidates uncomfortable. Certainly, both Hillary Clinton and Barack Obama have said they support ending the Henry Kravis Loophole - and that is, indeed, a good thing. But both candidates are also surrounded by an army of private equity mavens, and have taken a huge amount of money from the very fat cats that benefit from this tax code sleight-of-hand.
This, of course, says nothing of John McCain, who -- as far as I can tell through a Lexis-Nexis search -- hasn't even been asked about his position on the Henry Kravis Loophole, despite his own pandering to the hedge fund and private equity industry.
There's no doubt that if and when this debate heats up, we'll be hearing from the wealthy that making sure millionaires and billionaires pay the same taxes as working stiffs is somehow "unfair." From Limousine Libertarians in Boulder to Cadillac Conservatives in Connecticut, the well-heeled will be screaming from the ramparts, "Elitists of World, Unite!" -- a battle cry to make sure Congress continues persecuting the middle-class on behalf of the yacht club crowd. But as the facts trickle out about the private equity scam, you can bet public pressure for change is going to start building.
And yes, the facts are trickling out. For too long, these kind of financial shenanigans have been disguised by esoteric terms and mathematical complexity. But now folks like Brave New Films are making it much easier to understand. To see what I'm talking about and find out how these privte equity rip-off artists scam taxpayers through the Henry Kravis Loophole, see Brave New Films short video below, then sign the online petition demanding the presidential candidates pledge to close this loophole for good.