In 2007, House Ways and Means Committee Chairman Rep. Richard Neal (D-Mass.) was an original cosponsor of a bill that would have closed a tax loophole that lets investment fund managers pay the lower capital gains tax rates on the income they earn from the fees they charge their clients. The capital gains tax rates of 15 or 20% are usually offered as an incentive for people who take the risk of investing their own money, but the loophole allows investment managers to use the lower rates even though it is their clients’ money that is being invested, not their own.
During the 2008 election cycle, Neal began collecting much larger sums of campaign money from the securities and investment industry than he had in any of his previous elections, and he never again signed onto the bill, although it has been introduced in nearly every Congress session since.
Now, Neal is leading his committee in designing the tax aspects of the Democrats’ reconciliation package, and he is still not getting back behind closing the loophole.
Full post at The Brick House Cooperative.