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Editorial: Democrats finally get something done for President Biden. In the end, Manchin was more helpful than Sinema

Chicago Tribune Editorial Board, Chicago Tribune on

Published in Political News

As Democrats finally discovered reality and got some legislation moving, some mighty spurious arguments over the climate and energy bill emerged on both sides of the aisle.

Exhibit A was the idea that a beefed-up Internal Revenue Service should only audit people above a certain income level. That was floated by some of the same Republicans who have rightly lambasted progressive prosecutors for failing to protect America’s cities from the prevalence of repeat offenders who were sent back out on the streets.

Saying the IRS should only go after the really rich is akin to saying that how you are punished for a felony should be based on your income level. What nonsense. Equal justice for all.

Let’s review. We must all pay taxes. Some of us cannot be trusted and thus the IRS must have the power to verify self-reported income and expenses on a reasonably expansive basis.

Certainly, the IRS must conduct itself ethically and not hound taxpayers unfairly. It makes sense for it to use the majority of its resources on returns that give the government the most bang for the buck. But honesty should be demanded of everybody; tax cheats cost all taxpayers money.

As unpleasant as it may be, tax compliance is part of the compact of a functioning democracy. Everyone should be held accountable to the same degree. Let the IRS be efficient, well funded and capable of ensuring that all Americans pay their fair share (and capable of answering its own phones).

 

Which bring us to private equity, a sector seemingly beloved by Sen. Kyrsten Sinema of Arizona, who appears to have successfully negotiated the continuance of a tax loophole so egregious it even irritated Donald Trump and many tax-despising Republicans.

Sinema, it seems, single-handedly nixed the nixing of the so-called carried-interest provision in the bill. In simple terms, this perk allows the hardworking Americans who toil in the sweaty fields of private equity to pay their taxes at the lower rates that apply to capital gains, rather than the higher earned-income rate that we hourly and salaried stiffs must endure.

The industry and its powerful lobbyists and apologists on editorial boards and the like have argued that this loophole (which, by the way, is paid for by all of us) is justified because in essence, this income represents “risk capital.”

What balderdash.

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