Major Media Ignore Bush's Veto Threat over Tax Bill

     A bill that would increases taxes for investors and threaten the U.S. economy attracted warning of a presidential veto, but no major news coverage.

     “The ramifications of this [bill] are dire for the U.S. economy, federal revenues, and ordinary investors,” wrote Phil Kerpen in National Review Online.

     The Washington Post included this cost estimate from Bloomberg in a June 22 story:

     “Lawmakers are targeting carried interest as part of a broader examination of how hedge funds and buyout firms are taxed. Informal estimates show that taxing carried interest at the same rate as salaries may generate at least $4 billion a year in additional taxes, Bloomberg said.”

     The bill that President George W. Bush threatened to veto was introduced by Michigan democrat Rep. Sander Levin. It would change the current rate of taxation on investment partnerships like pensions, hedge fund and venture-capital investments from the capital gains rate of 15 percent, to the income tax rate – which can be as high as 35 percent.

    White House Press Secretary Tony Snow told reporters on June 27 Bush would veto any “broad moves” by Congress to change the tax rate currently in place.

     “This is not an administration that's predisposed toward tax increases,” Snow told The New York Post.

     Economist Larry Kudlow of CNBC explained why Bush’s veto was important during an interview on Hugh Hewitt’s radio show on June 29.

     “It is precisely the president’s low capital gains tax rate, low dividend tax rate and low income tax rate that has helped this economy and stock market enormously even though the poor guy doesn’t get any credit,” said Kudlow.

     Kerpen, policy director for Americans for Prosperity, also warned in his NRO article that raising capital-gains rates to such high rates “would significantly raise the cost of capital, drying up investment in many innovative, entrepreneurial companies.”