By a strange quirk of taxation, hedge fund managers get to pretend that their income from their jobs is not, in fact, income. Instead, they can write it off as capital gains.

Capital gains has a 15% tax, Income would have a 35% tax (supposing that their income is in the top bracket).

Just like software companies claiming “it’s a feature, not a bug”, some of those very wealthy tried to convince people that their tax evasion was by design, and not a loophole at all.

However, there is no reason that hedge-fund managers get to treat their income differently than anyone else.

Furthermore, this loophole is really wide:

Now, the debate is not about taxing capital gains like regular income, though some of the less honest among us might make that claim. The point here is that hedge-fund managers should see their income treated just like our income. The president, congressional Republicans, and a disconcerting number of Dems (Chuck Schumer, we’re looking at you) believe they deserve to keep a tax break that has no rational purpose.

And what a break it is. As a result of this inexplicable policy, the government loses out on $6.3 billion of revenue each year (a sum which would, Krugman notes, pay for healthcare for 3 million children). What’s more, almost $2 billion a year in unjustified tax breaks goes to just 25 individuals.

You can read more at The CarpetBagger Report.

Eric Alterman has his own Schumer-related hedge-fund anecdote:

When I reviewed Schumer’s book, I did not want to take the space to discuss the thing I found most annoying about it, which is his invention of this middle-class family he calls “The Baileys,” about whom he talks incessantly on the stump. I wasn’t reviewing his stump speech, but let me tell you, as a literary device, the Baileys are one annoying group of people. All they ever do is agree with Schumer. Otherwise, they have no independent existence or reason for being. The word “cliché” does not do them justice; it has too much nuance, too much character, too much depth …

Anyway, I went up to Schumer to ask him if the Baileys thought that they should have to pay a tax rate on their earnings more than double than Wall Street billionaires did. Mistakenly, however, I called them the Reillys, and he took this as an opportunity to lecture me on my ignorance. I see from this article, however, that until June of last year they were called “the O’Reillys,” so really, Chuck, that was rather nitpicky. Anyway, Schumer was in no mood to chat with yours truly, and he instructed me, pointy finger and everything with no room for conversation, that he had already checked with the Baileys and they were, naturally, totally on board with this billionaire tax break that he is fighting so hard to protect.

And now a special bonus voting report:
Kuhl, Reynolds, and Walsh vote “aye” on giving the Attorney General sweeping new powers to rip up the fourth amendment.
Slaughter votes “nay”.