How bad is the federal tax code? One loophole has gotten much deserved attention. Under current law, hedge fund managers classify their bonuses as capital gains and pay only taxes only at a 15 percent rate instead of the current highest personal income tax rate of 35 percent. (Yes, the bonuses are large enough to ensure that the managers are paying the highest rate.) Mind you, the bonuses are not a reward for their capital but for their work.
How much would be saved by closing this loophole? $20 billion over ten years. In fact, if you only closed the loophole for the top 25 hedge fund managers, would raise $4 billion in new revenue, the same amount of taxes collected from 441,000 middle class families.
$20 billion will not close the federal budget gap. But, it is shocking and worse than shocking - and immoral - to maintain such incongruous loopholes while gutting programs that help the poor.
(h/t Center for American Progress)