When Character Matters: Why Hillary Clinton is Unfit to Serve

The beauty of democracy is also its tragedy: the citizenry gets what it deserves (with rare exceptions). Unengaged, undemanding publics almost without fail get political leaders who exploit the system for personal gain. Conversely, engaged publics whom enforce high standards for political offices tend to elect leaders worthy of the title. Admittedly, some sycophants sneak through, but they are the exception, not the rule.

When political leaders abuse the system, it is not because the citizenry deserved more but because it demanded too little. Voters who downplay the ethical requirements of high office deserve little sympathy when a snake oil salesman takes power. Ultimately, voters need to determine whether candidates are ethically and morally fit to serve before even considering whether their policy platforms are wise. Being worthy of the office is, or at least should be, a pre-requisite.

This theoretical digression is intended to ground the following commentary on former Secretary of State Hillary Clinton’s candidacy for the Presidency. Whatever one’s view of her policy positions, it is becoming eminently clear that she is unfit to serve the office she seeks. These words are not uttered carelessly, for it is a serious charge. One must also be cognizant not to be the partisan hack whose first arrow in the quiver is the personal attack. Calling into question a candidate’s ethical grounding and motives is serious and requires overwhelming facts not idle speculation.

At every turn, Secretary Clinton’s decision-making seems motivated by a singular question: what decision will further my political career? She is a political opportunist, happy to pander to the nearest constituency, and more than willing to push laws (or at least the public’s trust) to their breaking point, if not beyond. Of course should she be caught in a contradiction or ethical quandary, Clinton steadfastly refuses to issue a sincere apology, at best she offers an apology at the behest of the donor class, which is quickly walked back in subsequent news stories (see NY Times in re her email apology). An ethically dubious political opportunist incapable of apologizing? Upon closer inspection, it is difficult to decipher any distinction from Donald Trump.

The charge she is unfit to serve also goes beyond a handful of flip-flops, for while they are unpleasant, a couple of policy changes has become so commonplace it would disqualify just about everyone (this is perhaps a sad statement on our political reality). For instance, Clinton’s opposition to the Keystone Pipeline was a clear example of political pandering, why after all did she wait until polls showed some softness before opposing it when she had countless opportunities to do so over the years? Unpalatable? Yes. Disqualifying? No.

Clinton’s opposition to the Trans-Pacific Partnership (TPP) trade deal was more egregious. After all as President Obama’s Secretary of State, she played a key role negotiating it. In her memoir, she described TPP as “important for American workers” and a key aspect of America’s pivot to Asia. In fairness, she retired prior to the completion of the deal, so perhaps our negotiating prowess collapsed without her watchful supervision. Perhaps…Of course, her opposition to TPP—citing the lack of credible safeguards and enforcement mechanisms—is on its face ludicrous given her support for the exceptionally lax Iran Deal.

On Friday October 23rd, the pandering reached a new zenith of absurdity when Clinton told Rachel Maddow the following on the Defense of Marriage Act:

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One’s view on whether DOMA was a good law is essentially irrelevant. Its intent, until now, has been beyond dispute: to keep the federal government from recognizing same-sex marriages. Republicans wrote the law, so Clinton is essentially arguing that the 1996 republican majority was secretly trying to protect gay rights in a defensive fashion. Does anyone believe that? Plus, her husband signed the bill into law and subsequently used his support to shore up votes in the Christian community, erasing any (miniscule) chance Senator Dole had in the election. Either Bill Clinton lied in 1996 about his motives or Hillary Clinton is lying today. Why the senseless pandering that any rational person can see through? Public sentiment on this issue has changed so rapidly that voters would accept a mea culpa with little hesitation and move on, yet Clinton again shows herself incapable of apologizing. Why apologize when you can lie after all? Even Bernie Sanders, who refused to take her on over her “damn emails,” took this on at the Jefferson-Jackson dinner and in subsequent Sunday show appearances. Such bald-faced lying demeans what should be a serious campaign (both sides often come up woefully short on this aspiration I concede).

Speaking of those emails, that really is a far graver offense. Hillary Clinton opted not to have a computer in her office, yet for convenience used a personal server for her email? If you buy that, I have a bridge to sell you. The only reasonable explanation for this decision is that she wanted control over her emails and the ability to decide which ones to hand over to taxpayers. If not illegal, this decision certainly undermines the public trust, for something nefarious does seem afoot. It distorts the natural order that public servants work for the public in favor of officials determining what the public is fortunate enough to have access to. Deleting 30,000 emails is clearly wrong. Once work and personal emails are co-mingled, the only acceptable solution is to turn over all emails to an independent commission and let them determine what it is in the public domain. Work emails are the public’s property; to delete just one mistakenly is theft. A public official cannot flout protocol and common sense and be rewarded by determining herself what to turn over. We may as well start handing out “get out of jail free” cards.

In her quest for control, Clinton also recklessly risked national security—the idea a private server is more secure against a foreign hacking is laughable if it weren’t so troubling. Plus, she received and sent classified information over the server, dozens if not hundreds of times. In the eyes of the law, whether a document was actually marked classified is entirely irrelevant, and as Secretary of State, Clinton was made aware of that fact. Her blatant disregard for protocol is alarming and shows a willingness to put personal interest (i.e. the ability to interact beyond the reach of her employer, taxpayers) ahead of the nation’s interest (i.e. keeping classified interest, you know, classified).

Together, these actions, her server the most egregious, showcase a politician with a troubling ethical compass (and we aren’t even discussing the 1990’s!), but on Thursday, we received the capstone. In a Benghazi committee hearing where the media narrative was already written before the first word was spoken, we learned that Clinton knew the Benghazi attack was indeed a terrorist attack that very night, telling Chelsea as much. However, in the following days, she went along with the Administration story that a video led to a spontaneous demonstration gone awry, telling the victims’ families as much.

What is more heartless than looking in the eyes of a grieving family and spinning a lie to protect poll numbers? Don’t we demand our political leaders to be honest, particularly during a moment of crisis? By bringing forth this new email, Rep. Jim Jordan provided the smoking gun to a crime almost all fair-minded knew was committed. Did Clinton break the law by backing a story she knew was wrong? No (in the world of intelligence, one can always find some legal wiggle-room), but don’t we demand more of our leaders than merely following the law? Shouldn’t we hold them to a higher standard of actually doing the right thing? What a novel concept.

Pandering on every controversial issue, leaving us unsure what she actually believes. Patently lying about the intentions of a key law her husband signed. Endangering national security to keep her communication away from taxpayers. And now, clearly deceiving the nation and families about a terrorist attack. Is such a person worthy of the office of the Presidency? If someone is willing to commit such acts to attain political power, what will that person do to retain it? Is that the sort of person you entrust the nation to, even if you think she’s right on tax policy?

Paul Ryan, Unlike Hillary Clinton, Is the Kind of Leader We Need

In the weeks after Speaker John Boehner’s announced his resignation, two facts have become clear if not irrefutable:

  1. Paul Ryan is the only person capable of getting the required 218 votes to become Speaker of the House
  2. Paul Ryan has absolutely no interest in being Speaker of the House

Now for the past two weeks, national Republicans have subjected Ryan to a full court press to become Speaker. Eventually, I suspect Ryan will capitulate because he can see as clearly as anyone else that no one else can actually do the job (reports suggest he is getting closer to “yes”). Ultimately, the country (and the Republican Party) needs someone to be Speaker of the House to keep the House from descending into total dysfunction. That said the very reason why Ryan would be such a great Speaker is the only reason why he may not be Speaker: he doesn’t want the job.

Democracy demands leaders who seek power not for personal gain but for the betterment of the nation. Voters should run, not walk, from self-aggrandizing candidates, seeking power just for the sake of wielding it. As an aside, this is a fundamental flaw in Hillary Clinton’s campaign for the Presidency. She seems to run only because she wants to be President to have her name etched in the History books rather than because she feels compelled to fix serious problems (of which we have numerous, thanks in large part to the current President). Heck when asked to explain how her Presidency would be different from Obama’s at the debate, all she could muster as an answer was that she’s a woman. If the underlying rationale for seeking the most important job on the planet is your gender, one really has to wonder if you are running to better the nation or merely to stroke your ego and wield power you have felt entitled to for years.

Politicians who seek power for power’s sake will lie, cheat and steal to attain power; they will do the same to keep it. Nixon’s Watergate and Hillary’s private server are examples of this. Unfortunately, we also see individuals who begin their careers seeking to better the country gradually succumb to the allure of power over time, trading their principles for political self-preservation; hence, the often widespread support of term limits among voters to counteract this reality.

As voters, we should not only avoid politicians who seek power for their own sake; we should also seek out politicians seeking to better the country. We are better off with leaders whom we agree with 80% of the time (or even less) but have clear guiding principles than leaders whom pander to us 100% of the time for the sake of jumping in opinion polls. If a leader can’t be trusted to be honest, that individual is unfit to serve.             That brings us back to Paul Ryan, the anti-Hillary. So much of the distrust felt towards House Leadership by the Freedom Caucus and grassroots base was the (often unfair) belief Boehner et al focused on staying in the good graces of K Street than fighting for conservative principles. Tactical disagreements quickly became a referendum on the personal character of leadership. In Ryan, we’d have a leader who doesn’t even want the job but is serving for the sake of the country. That fact gives him, and the deals he strikes, more credibility, making it easier for him to govern and lead a fractious GOP majority. Ryan can’t change the reality that Obama is still the President, but he has been offering specific, conservative solutions for longer than anyone else in the House.             Ryan leaving the Ways and Means chairmanship he so loves to assume the Speakership would be one of the clearest example of a politician putting the needs of the country ahead of personal ambitions in years. After all, he already chairs the most powerful committee in the House, which is also suited for his wonky tendencies, and is currently positioned to be the critical player in the next President’s efforts to reform our inefficient tax code. He’d be taking a thankless job where he is basically a glorified psychologist for 246 bloated egos, herding cats, and dealing with a President who has no interest in doing anything other than score political points for the next 15 months. It’s no surprise he doesn’t want the job. If anything, his path to the Presidency over the next 15 years would be complicated by becoming speaker.             We need a Congress that works for the public, prioritizing the needs of the country, and that starts with selfless congressional leadership. Ryan would fundamentally alter the paradigm of long-serving Washington insiders taking power. Instead, we would have a Speaker primarily interested in policy and in governing who has spent a decade explaining a hopeful, conservative vision for the country.

What a powerful contrast to a Democratic Presidential frontrunner who has spent years adding job titles to her resume without accomplishing much, except for finding new ways to break the laws and violate the public’s trust. In Ryan, we’d have a People’s Speaker in the People’s House.

Doomed to Fail: A President Dithers

During a 60 Minutes interview in which President Obama could only offer rambling and incoherent answers to Steve Kroft’s fair and pointed foreign policy questions, the President did manage to shed new, and rather unflattering, light on his disastrous Syria policy. After backing down from his own red line when Bashar al-Assad gassed his own people, Obama decided to launch a $500 million rebel training program whereby the United States would train moderate fighters to oust Assad. With only 4 or 5 trained rebels currently fighting in Syria, it is safe to call this program a failure. Perhaps we shouldn’t be surprised. After all, the President himself said last night, “I’ve been skeptical from the get-go” that the training program would work.

What does it say about a President who built a strategy around a program he deemed doomed to fail? How callous to watch thousands of Syrians die each month at the hands of Assad, and now ISIS, while pursuing a program that you don’t believe can work. It is one thing to try and fail; it is entirely different to pretend to try and fail. In a Presidency chock full of stunning admissions, this has to rank near the top of the list. The Syrian Civil War has raged for over 3 years, and the only strategy the Administration could come up with was essentially fictitious.

While dithering away time and letting Syria devolve into one of the world’s worst humanitarian crises of the past quarter-century, he’s let ISIS stand up and fill the power vacuum. The President doesn’t even have a plan to deal with ISIS, saying that over time “the community of nations” will deal with ISIS. What is this community the President speaks of? China enjoys all the perks of being a world power without assuming any responsibilities, Europe hasn’t led in decades, and Russia is directly flouting Obama’s high-minded goals. The concept of such a community is noble and works well as a dissertation at Columbia University but is dangerously simplistic when applied in the real world. A community of nations only exists when America plays the leading role.

Instead, Obama has stepped back and is now letting Vladimir Putin decimate the rebels we’ve aided without impunity from the air. What message does this send to other potential allies in the region? The US will not stand by you when times get tough, which will undermine our ability to form strategic relations in the region for years. With Putin allied with Iran—the region’s aspiring hegemon—the moderates are being wiped out, leaving only Assad and ISIS, an unpalatable choice, and the Russia-Iran axis will inevitably pivot to push back ISIS from Syria and Iran all while the President awaits for the community of nations to respond.

The overarching failure of President Obama’s foreign policy is a simple one: he dithers until the United States is left with virtually no winning option. In Syria, we could have provided substantive support for moderate rebels and toppled Assad. Now any action risks direct military conflict with Russia, and quickly, the only two feasible options are ISIS or Assad. Three years ago, we had options that could tip the balance in our favor; now, there are none.

In Iraq, we could have signed a “status of forces” agreement to leave residual troops in Iraq, continue to train their military, and ensure the hard-fought gains we made were kept. Instead, Obama made no serious effort to get this agreement, pulled out entirely, leaving Iraq weak and vulnerable, and leaving it easy for ISIS to take large swaths of territory. Now, what is left of Iraq is morphing into an Iranian client state as the US has unilaterally ceded all influence. Obama could have kept troops in Iraq, or he could have provided serious assistance in the fight against ISIS last year. Instead, he has done as little as possible and somehow allowed a nation we spent a decade building to align with our major rivals, Iran and Russia.

In 2014, Obama had a chance to swiftly respond to Russia’s illegal seizure of Crimea by providing arms to the Kiev government and restart the Eastern Europe missile defense shield, a real cost in Putin’s eyes. These actions could have stopped Putin in his tracks, winning Crimea but realizing the rest of Ukraine would not be worth the fight. Instead, Obama merely lectured Putin, so he launched a covert operation in East Ukraine and essentially split the country in two. What can the US do now apart from some meaningless sanctions? Providing the necessary support to the Ukrainian government to roll back Russia would be exceedingly costly and risk direct military confrontation with a nuclear power while giving Putin cover to escalate his involvement. The other option, to accept Russian expansion, would be the most humiliating strategic defeat against Russia since the Carter Administration. By doing virtually nothing serious for 18 months in Ukraine, we face another no-win situation.

Last, Obama foolishly loosened sanctions on Iran just for coming to the negotiating table, ceding the leverage that brought them there. At that point, reasserting the sanctions was all but an impossibility, forcing us to accept an embarrassingly weak deal. Iran doesn’t even care about the few restrictions in the deal, testing a long range missile this week despite that likely being forbidden in the text. They know this administration won’t do anything to nullify the deal because we could never get Russia and China to okay sanctions at the UN again. If we had actually kept sanctions in place during the negotiation, we would have maintained leverage and been able to reach a good deal with real verification. Either we accept a flawed deal that lets Iran become a threshold nuclear state over a decade or we isolate ourselves diplomatically by exiting the deal and imposing further sanctions ourselves.

From Syria to Iraq to Russia to Iran, Obama has been so consistently wrong and soft that we are left with a host of complex situation where there is no clear option for the US. In each situation, had we acted swiftly, we could have gained the initiative and reached a strategically favorable outcome. Instead, American power is being challenged around the world. That is the legacy of this President. His successor will have to navigate minefields just to scrape out draws, by aggressively reasserting our military presence to assuage panicked allies in the Middle East and Eastern Europe alike while reminding bad actors like Putin that the U.S. really is a force to be reckoned with.

Obama’s Presidency is one of bungled opportunities. Would you expect less from a man who expects his own policies to fail?

We Need Paul Ryan

Well, it’s safe to say the House Republican Caucus has descended into total disarray after Majority Leader Kevin McCarthy unceremoniously bowed out of the Speaker’s race. While I continue to believe Boehner stepping aside was a good thing (or at least a necessary action given the loss of trust—fair or not—amongst conservative members), the situation has descended from bad to worse as seemingly no qualified candidate is interested in what may be the most thankless job in Washington.

It’s clear now that McCarthy’s horrible Benghazi remarks undermined his ability to win over skeptical anti-establishment figures like those in the self-described Freedom Caucus. Whoever the next Speaker is, he or she needs to be an adept spokesperson for the party and conservative principles. Realizing he could no more effectively govern than Boehner has, McCarthy did what was best for his country, institution, and party by stepping aside.

Now, it is a question of who steps forward to lead what often seems to be an ungovernable caucus that is now suffering from virtually unprecedented internal strife (if not civil war). The tension between the establishment and right flank of the caucus has been building for years, especially since the ill-fated shutdown of 2013 that achieved nothing. The establishment sees the “conservatives” as uncompromising idealists who fail to bend to political realities while the “conservatives” see the establishment as wimps unwilling to fight for campaign promises. Both sides are partly right and partly wrong.

Until the party can unify, chaos will persist, but these divides are bridgeable. Most of these intra-party disputes revolve around tactics not policy (ie virtually all republicans want to defund Planned Parenthood, the question is how best to go about it). We need a Speaker who has the support of the establishment and the trust of conservatives. Conservatives saw in Boehner (and by extension McCarthy) a leader unwilling to fight; again whether this is fair or not is almost irrelevant because perception becomes reality. By losing the trust of conservatives, he lost their buy-in on key measures, making it impossible to have any leverage in negotiations with Democrats.

Given the sheer duration of this intra-party battle, few members have the capacity to earn the support and trust of all GOP representatives, which is why Paul Ryan needs to step up and lead. Ryan has proven himself to be a thoughtful policymaker with a bold vision of what a conservative America can look like as witnessed by his budget plans. Ryan has the ability to maintain the support of the “Boehner core” while winning the trust of the anti-establishment to negotiate seriously with the President.

Ryan’s conservative bona fides are all but untouchable with budget plans that have shaped the core of conservative fiscal thinking, and he also has the proven ability to cut a deal when necessary as he did with Senator Patty Murray to partly deal with sequestration. He is the man best positioned to unify and lead the party—in fact with the possible exception of Trey Gowdy it is unclear to me any other House member could build the necessary support to be Speaker. Plus, despite some suggestions to the contrary, the idea of selecting someone who isn’t a member of Congress as Speaker is short-sided. What does it say about a party that has over 240 members and can’t find a suitable person to lead; having an unelected individual be the face of the party is politically perilous.

Sadly, it is clear Ryan does not want the job and would prefer to stay Chair of Ways and Mean, a perch from which he can negotiate tax reform with the next President. Plus, becoming Speaker would require significant personal sacrifice, keeping him from his family as he has to fundraise and campaign for fellow members. However, at this moment, this country needs Ryan as Speaker so that we can have a Congress that functions to some degree. As Speaker, Ryan would still be heavily involved in tax reform and any other major policy initiatives. Plus, the Republicans will likely maintain control of the House through the 2020 election, meaning Ryan could easily be Speaker for north of 7 years (if not longer), which would give him the ability to shape the course this nation takes to a larger degree than as a committee chair. Since he is only 45, he could be a major force in DC for quite a while and still have a plausible path to the Presidency, should it interest him.

America and Republicans need Paul Ryan, and while the personal and family sacrifices are real, I hope he is able to find a way to “yes.” At the moment, republicans look like buffoons, and should this continue, 2016 election prospects could start to dim. After all if the GOP can’t even pick a Speaker, how can we expect voters to entrust us to govern the country? The Republicans still have a chance to steal a victory from the jaws of a humiliating defeat if we can find a Speaker whom the caucus will follow. Given his ability to articulate a conservative vision, unify the caucus, regain the trust of conservatives (both in the Caucus and in the Grassroots), and work with Democrats when necessary, Paul Ryan is the best if not the only choice for Speaker.

Representative Ryan, your country and your party are clamoring for you. Please say yes.

Why We Tax–Moving Beyond Carried Interest

For the past few weeks (alright years), it feels like the debate on tax reform has centered around the “carried interest loophole” whereby private equity managers get their income taxed at a low rate. Based on the tax plans of Jeb Bush and Donald Trump, it appears the GOP is willing to remove the loophole as part of broader tax reform. Ultimately, removing the loophole is barely relevant, perhaps increasing revenue by $3-4 billion/year. Rarely has so much time been spent on an issue that matters so little. However, there are important policy lessons to be gleaned from the carried interest debate that actually have profound impacts on how and what we tax.

The Democrats have largely argued the point on “economic fairness” grounds, and republicans must be careful not to let the debate slip into this territoy because the fairness argument is misguided.

Let’s begin with the fundamental question: Why do nations tax? Nations tax to generate revenue that funds the government and associated social programs. Via these programs, the government (at the federal, state, and/or local level) provides national defense, education, welfare, economic and social security, etc. With the revenue, we can provide some comfort during retirement (ie Social Security and Medicare) or help those in hard times (ie unemployment insurance and food stamps), whatever that society deems fair and appropriate. The goal of taxation then is to provide the necessary amount of revenue while having the least impact on growth and the economy as in the end economic growth and not government provides the path for upward mobility and superior standards of living over time.

At the Federal level, we probably need to generate around 17.5-19.5% of GDP as tax revenue to provide services and run a roughly balanced budget. The challenge is finding the right mix of taxes that achieves this revenue run-rate while having the least negative spillover into the economy and capital allocation. By choosing not to tax X, we have to tax Y, so the economics savings of X better outweigh the costs of Y. It is at this level where the rationale for the carried interest loophole collapses. Was there really no better use for that $3 billion than exempting private equity managers from income tax rates? Almost certainly not. We are better off spending that $3 billion lowering taxes on the middle class who will spend their tax savings.

Economic fairness is a challenging, intangible concept, and typically, the side getting the benefit is the one who deems the action is fair, irrespective of reality. Fairness is a powerful political argument in the short-run that wreaks havoc in the long-run. Theoretically, what is fairer than a communist system where all join in the spoils equally? Yet in reality, such systems atrophy, breed corruption, cronyism, and collapse (see the Soviet Union). Economic fairness quickly erodes into an effort to help out connected industries and firms, unleveling the playing field. Focusing on making the tax system more efficient (ie maximizing revenue while minimizing economic distortions and mal-incentives) often yields the same results while promoting a balanced, growing economy that benefits all over time.

It is from this perch that republicans should argue tax and economic policy, and the potential for change is breathtaking with carried interest just a drop in bucket. Whenever a financial decision is made for tax rather than economic reasons, chances are that an inefficient tax policy is in place, and the shining example of this is the deduction of corporate interest expense, something the Bush and Trump plans actually start to address. Under current law, corporations cannot deduct dividend expense but can deduct interest expense, which makes debt artificially inexpensive.

Making something artificially cheap tends to lead to more of it, and debt is typically not something you want to incent the creation of. Leveraged systems have greater fixed charges and can be more vulnerable to shocks. A major reason why the tech bubble bursting only lead to modest recession while the Housing bubble nearly precipitated a global depression was the tech wreck was (primarily not exclusively) an equity issue whereas the housing crash was (again primarily not exclusively) a debt issue. Put simply, you cannot go bankrupt if you don’t owe anyone money. Equity losses are painful, but being unable to pay back debt can be devastating. Now, this is not to say the government should actively disincentivize debt, which can play a critical role in a capital structure and is a preferred asset class for many investors.

Rather, the government should neither incentivize debt nor equity over the other, instead letting the pure economics lead to the decision. Unfortunately, we have a system of financial arbitrage (a clear sign of an inefficient tax policy) whereby companies issue debt to repurchase stock because tax savings make interest expense less than the cost of the stock’s dividend. Similarly, private equity firms can sometimes can generate excellent returns, merely by issuing debt to take out equity and enjoy a sizable tax break. Now sometimes, these transactions make good economic sense, and as such, they would continue without the tax deduction. However, transactions that don’t make sense would not occur, and that capital would be free to be used in ways that are actually economically justified, which would be supportive of long term growth.

Removing interest deductibility on nonfinancial firms (financial firms like commercial banks need it to operate as they are in the maturity transformation business) would raise around $120 billion/year (about 40 carried interest loopholes!). To make up for this lost revenue, we have to maintain absurdly high marginal rates, and in the end, less indebted firms are subsidizing heavily indebted firms. It just so happens that these less indebted firms are often in technology, healthcare, and many start-ups, which are the primary engines of growth and innovation. The firms we need to invest for our economy to grow are the ones saddled paying for someone else’s subsidy.

By removing just this one deduction, we could bring headline corporate rates down to about 25-27% from 35%, making the US tax regime much more competitive immediately while giving our most innovative companies more after-tax profits (as they are no longer subsidizing heavily indebted firms) to invest in the future. Recognizing that some small business rely on bank loans to fund growth, we could continue to permit the deduction of interest expense on the first $25 million of debt without meaningfully impacting the amount of incremental revenue.

Now obviously any reform has to be phased in over about 5 years to allow companies who have built capital structures based on tax policies time to adjust and move to equity funding in a gradual fashion to avert a shock. In the end, moving on interest deductibility is the logical next step in the carried interest debate, and it actually will generate meaningful revenue with which to lower rates. Plus by no longer incentivizing debt over equity, we will build an economy more appropriately funded and insulated from potential shocks, which will be constructive for long term growth.

Carried interest and interest deductibility are just two examples of inefficient tax policies that lead to the misallocation of resources and unnecessarily drag on growth. Addressing these and other loopholes to bring down rates is the best path to counter the democrats’ politically motivated but doomed-to-fail “fairness” pitch as this conservative approach is the surest way to achieving economic growth and help the middle class regain the ground it has lost under the Obama Administration.