AFTER HOURS, LEGISLATORS DON’T KNOW THEY’RE BEING LOBBIED

“David Rubenstein's patriotic philanthropy can be seen as a way of
establishing the level of control over his wealth that [Andrew] Carnegie enjoyed.
In Caregie’s time, there was no federal income tax; charity was the primary
means the rich had of giving-back to  society, and they could, of course,
determine the size of their contributions. The super-wealthy now view taxes more

or less the way Carnegie viewed higher wages, or alms spread among the needy:
as more likely to be frittered away than if they bestowed the money themselves.
The [Federal] tax code supports this view, making charitable giving tax-deductible.

By 2013, the amount written off by all taxpayers was more than forty billion I
dollars annually. The wealthy benefit the most, because they are deducting

income that would otherwise be taxed at the highest personal rate.

[“The Library of Congress dinners that David Rubenstein sponsors]
“remain one of Rubenstein's most useful tools for strengthening his influence.
. . . .  Among the members of Congress who attended were several Democratic senators who
had figured prominently in the carried-interest debate: Chuck Schumer, Mark
Warner, and Kay Hagan, the Schumer protegee, who lost her North Carolina

seat in 2014.

. . . . . . . . . . . .

“One staff member at the library, referring to earlier events, told
me, ‘I looked around and thought, This is pretty chummy here. These
members of Congress don't even know they're being lobbied.’"

Alec MacGillis, “The Billionaires’ Loophole,” New Yorker, March 14, 2016, pp: 64-73.

$100 MILLION TAX SAVINGS FROM ONE PERSON

“Writing in the [New York] Times in June of 2015, Victor Fleischer [the carried-interest loophole’s opponent] analyzed the most recently available I.R.S. income data, which are from 2012, and described a technique of approximating the carried interest generated by financial firms. (Investment funds are not required to report that figure outright.) He estimated that, in 2012, one subset of financial firms had generated forty billion dollars in carried interest, taxable at the capital- gains rate. Had the loophole been closed, the Treasury would have taken in eight billion additional tax dollars, or eighty billion over ten years, from just this one subset. He also often argues that the government estimates could not be right, given that [Stephen] Schwarzman alone made around seven hundred million dollars in each of the past two years, resulting in annual tax savings of close to a hundred million dollars a single person.”

Alec MacGillis, “The Billionaires’ Loophole,” New Yorker, March 14, 2016, pp: 64-73.

AT LEAST $15 BILLION TO $25 BILLION SAVINGS

“[President Barak] Obama has continued to invoke carried-interest reform as a way, to raise
revenue. [David] Rubenstein, who no longer has to contend with any real attempts to close the
loophole, has little to gain by insisting that it be retained. Instead, he characterizes reform efforts
as a distraction. He told [PBS journalist] Charlie Rose in 2012, ‘Our bigger problem isn't carried
interest. Our bigger problem is the one-trillion-dollar annual deficit and the sixteen trillion dollars of
debt we have.’ At the Credit Suisse forum in 2013, Rubenstein said of the potential savings from

closing the loophole, "It's a very modest amount of money.’

“Victor Fleischer [the loophole’s opponent] disagrees. He believes that the revenue gained by loophole closure would be many times as much as official projections, which have ranged from fifteen billion dollars over ten years to twenty-five billion dollars.”

Alec MacGillis, “The Billionaires’ Loophole,” New Yorker, March 14, 2016, pp: 64-73.

AMONG THE WORLD’S MOST HIGHLY COMPENSATED PEOPLE

“Some support came from unexpected corners. On May 29^th [2010], Fred
Wilson, the co-founder of Union Square Ventures and an early investor
in Twitter, disputed on his blog the notion that reform would impinge on
the flow of capital. 'Changing the taxation of the managers will not reduce
the amount of capital going to productive areas,’ he wrote. ‘It's time for
asset managers to start paying their fair share of taxes. We are among the
most highly compensated people in the world. And we've been getting a
huge tax break for years."

Alec MacGillis, “The Billionaires’ Loophole,” New Yorker, March 14, 2016, pp: 64-73.