We all know that driving with one foot on the gas and the other \u00a0on the brake \u00a0just slows you down.\u00a0 And that dieting by day while binging by night will negate your weight loss efforts.<\/p>\n
Similarly, spending billions of taxpayer dollars to \u201cstimulate\u201d the economy and job growth, while simultaneously proposing tax increases that would stymie investments in new jobs, won\u2019t help us get our economy back on track.<\/p>\n
Unfortunately, that is just the proposal before the U.S. Congress, in the form of the so-called Baucus\/Levin American Jobs and Closing Tax Loopholes Act<\/a>. What\u2019s doubly unfortunate is the rush by some Congressional leaders to hastily pass this legislation without any public debate.<\/p>\n Among the provisions in the bill is a tax increase on \u201ccarried interest,\u201d which is the profit from a successful investment. Carried interest earnings are often used to spur further investment, and don\u2019t fairly constitute regular job income because the return on investment isn\u2019t guaranteed like a paycheck is. The proposed increase would take the tax from the current capital gains tax level of 15% (20% in 2011) to a punishing 40%.\u00a0 Consequently, investment partnerships would not invest as much as they do now.<\/p>\n Even some Senate Democrats recognize the folly in discouraging job-creating investments with this sort of tax increase. Four Democrats\u2014Patty Murray (WA), Mark Warner (VA), Bob Casey (PA), and Jeanne Shaheen (NH)\u2014along with Scott Brown (R-MA) have said<\/a> that taxing venture firms at higher rates would merely hurt job creation and \u201ccould not occur at a worse time.\u201d<\/p>\n There are additional reasons the carried-interest tax hike is a bad idea:<\/p>\n