ON-Lion Letter
"[W]hat seems to be bringing the two parties together lately is a misguided desire to raise taxes on capital gains, particularly capital gains earned by private equity fund managers, commonly referred to as carried interest," begins a March Milwaukee Journal Sentinel op-ed by Brett Healy and Patrick Gleason.

"Private equity is a key industry in Wisconsin and important to our economic health.  Wisconsin ranks 16th in the nation in private equity investment, and private equity firms have invested approximately $68.2 billion in Wisconsin-based companies since 2003," according to Healy and Gleason.  The tax hike that members of both parties "are all calling for would be detrimental to the approximately 401 private equity-backed companies headquartered in Wisconsin.  All told, these 401 Wisconsin companies employ more than 335,000 people.  There are more than 20 private equity firms that call Wisconsin home.  These companies employ our friends, our neighbors and family members."

Healy is president of the MacIver Institute in Madison, Wis.  Gleason is director of state affairs at Americans for Tax Reform in Washington, D.C.

"[T]he attempt to raise taxes on carried interest is the first step toward the long-held progressive goal of taxing investment income at the higher rates at which wages are taxed," they write.  "Proponents of raising taxes on carried interest often talk about tax parity and fairness, but note they never want to reduce wage income tax rates to the lower capital gains rate in order to achieve this.  That's because the goal for most of those targeting private equity is to raise taxes on net in order to grow the size of government.

"The belief that keeping the tax burden as low as possible promotes economic growth is supported by a large body of research," Healy and Gleason continue.  "John Hood, chairman of the John Locke Foundation, analyzed more than 680 peer-reviewed academic journal articles going back to 1990.  Most of the studies Hood analyzed found that lower levels of taxes and spending correlate with stronger economic performance.

"Wall Street is an easy piñata for politicians to beat mercilessly on the campaign trail," Healy and Gleason conclude.  "Yet the fact is that raising taxes on carried interest and any other form of capital gain would harm the Wisconsin economy and depress growth.  After being hit with more than 20 federal tax increases over the last six years, the last thing Wisconsin taxpayers need is another president who thinks Americans aren't taxed enough."

The Lynde and Harry Bradley Foundation in Milwaukee substantially supports the MacIver Institute, the Americans for Tax Reform Foundation, and the John Locke Foundation.
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