Anybody who has any doubts about the complete corruption of Congress should take a look at the carried interest deduction. For those of you not familiar with it, it is the loophole which allows hedge fund managers to have their income taxed at long term capital gains rates rather than regular income rates.
It makes absolutely no sense. Hedge fund managers take a cut of their investors' earnings, as they should. But they're not investing their own capital, they're simply taking an investment management fee. So why do they get to be taxed at the much lower capital gains rate? I know of no one who's examined this situation who feel it is fair.
But they get away with it because it is never mentioned in the press, and very few even know about it.
It all boils down to one thing: campaign contributions. Take two morally flexible groups, hedge fund managers and politicians, put them together, and what do you get? A 15% tax rate for the hedge fund managers, some of whom make over a billion a year. (I wouldn't be surprised if some of those "campaign contributions" were off the books, though I certainly can't prove that.)
These are the real millionaires and billionaires who ought to be taxed more, not the married couples who together make $250,000 a year.
Addendum, 7/16: Someone just wrote in to explain that the hedge fund managers only get that long term capital gains rate for their share of the profits on positions they carry for over a year, which for most of them is less than half of their positions. (They shouldn't get it at all, but at least they don't get it on most of their income.)