I just spent five minutes talking on-air with Boston radio host Barry Armstrong, on a show called The Financial Exchange on Money Matters Radio. This was prompted by my being quoted in yesterday's NYT article by James Stewart regarding the carried interest rule, and in particular Donald Trump's role in prompting Republicans to oppose it.
In our colloquy, Armstrong noted that it has generally been Democrats, not Republicans, who have wanted to require hedge fund managers to pay income tax at ordinary rather than capital gains rates on their hundreds of millions of dollars of what is economically labor income. In the interest of being fair, I noted that the hedge fund managers who want to retain their tax breaks do not entirely lack Democratic friends, especially in states such as New York and California.
When Armstrong asked about Trump's bringing this issue to the fore as a Republican, I noted that Trump is not exactly wedded to Republican tax orthodoxy. And whatever one can say against him (yes, I know), he is certainly not a puppet of Republican donors - to use the term that he has thrown at Jeb Bush.
A missed opportunity for Trump at the debate the other night (although perhaps it wouldn't have played well with the audience) involved the following. He was asked about his calling Bush a puppet of the donors, and he didn't try to back it up. But no clearer case of puppetry could be imagined than Bush's proposing a $3.4 trillion tax cut over 10 years, more than half of it going to the top 1%, despite overwhelming empirical evidence, from repeated experiments, that it won't yield the growth payoff he claims, and also the political fact that the Republican voter base is not actually thirsting for such a thing (so it's not driven by voter preferences). Bush has of course adopted Trump's position on the carried interest rule, evidently as a fig leaf, but, as I noted in an earlier post, that shouldn't really fool anyone regarding the Bush proposal's predominant character and effects.
UPDATE: Here is the audio link for the interview.