Steal from the Poor, Give to the Rich

The following was originally published at Working America's "Main Street" blog.

Having moved to protect more of the income of wealthy hedge fund and other investment managers from being taxed at normal rates, the Senate is now considering taking $100 a month away from recipients of unemployment insurance.

The New York Times reports:

Senate Democrats are exploring whether to eliminate an extra $25 a week in unemployment benefits, part of the economic stimulus legislation passed in 2009, as a way to cut costs and attract Republican votes for a stalled package of tax breaks, tax increases on the affluent and safety-net spending.

Top officials said that change would save billions of dollars over the next six months and could lead to approval of an overall extension of jobless pay by making the legislative package easier to swallow for lawmakers worried about deficit spending.

When they approved the stimulus legislation in 2009, lawmakers raised the basic unemployment benefit by $25 to provide additional financial help. Some Democrats have suggested that increase be jettisoned as they try to hold down the cost of safety-net spending.

There are currently more than 10 million jobless workers receiving either state or federal unemployment insurance. Eliminating the extra $25 per week would cut the average six month unemployment compensation by $600. And it would reduce the average weekly unemployment check to $290.

Meanwhile, those needy hedge fund managers, they get to keep more of their sky-high incomes, with more of it protected from the tax rates ordinary workers must pay.

The Miami Herald reports:

Senate Democrats on Tuesday weakened efforts to end a controversial Wall Street tax break, watering down a bid to raise taxes on managers of hedge funds, private-equity funds, venture capital firms and other business partnerships.

The Senate action retreated from a step taken last month by the House of Representatives, where lawmakers voted to get tough with Wall Street financiers, an apparent bow to election-year pressure from constituents outraged that some captains of finance were taxed at lower rates than their secretaries are.

Currently, managers of these investment funds are compensated with a share of the fund’s profits, referred to as “carried interest.” This compensation is taxed as a capital gain, and the capital gains tax is now 15 percent.

Senators scaled back the House plan to tax as “ordinary income” some 75 percent of the fund-income these managers receive. Instead, the Senate would trim the tax hit to 65 percent, and 55 percent for assets held longer than seven years.

See what they mean by “cutting spending?” Yeah - your spending.

Views expressed on this page are those of the authors and not necessarily those of Campaign for America's Future or Institute for America's Future