Today, Mike Sommers, former Chief of Staff to former Speaker of the House John Boehner, started a new job as president of the Private Equity Growth Capital Council (PEGCC), a trade association for Wall Street millionaires.
Citizens concerned about the undue influence of money in politics should make note of this development.
Last year – and for more than two decades before that – Mike Sommers was the “go-to” guy for some of the most powerful people in Washington when it came to getting things done in the House of Representatives. He was at the center of every tax fight, budget fight, and government shutdown showdown. He knows all the important people in Washington; a lot of them probably owe him a favor or two.
Now, he is the president of the organization at the center of the fight to defend the carried interest loophole, one of the most indefensible tax loopholes in the American tax code.
Criticized by politicians from Donald Trump and Gov. Jeb Bush to Senator Bernie Sanders and Sec. Hillary Clinton, the carried interest loophole allows investment managers to pay the capital gains rate – rather than the ordinary income tax rate – on income they earn managing other people’s money (even though they have none of their own capital at risk).
The loophole is based on 16th century shipping law meant to protect captains against the loss of their boats.
That’s right, after decades working at the highest level of government, Mike Sommers in now in charge of defending a loophole that allows hedge fund billionaires to pay lower tax rates than dental hygienists, zookeepers, and the guy who valets cars at the fancy restaurant where hedge fund managers tip the maitre d’ to let them skip the line ahead of everybody else (so they will look cool and feel important).
Apparently, hedge fund managers believe that sitting behind their computer screens is as perilous as navigating the high seas on a wooden boat 400 years ago.
Ahoy.
Because of the PEGCC and Mike Sommers, this year hedge fund managers will pocket a range of $1.8 to $18 billion that they don’t deserve.
In November, several Patriotic Millionaires met with members of Congress to urge them to close this indefensible loophole immediately by passing the “Carried Interest Fairness Act” introduced by Senator Tammy Baldwin and Representative Sander Levin.
Almost every member we met with, Democrat and Republican, said the same thing. “Of course” they support closing the carried interest loophole, “However” it was “very important” to “address” the issue as part of “comprehensive tax reform.”
So apparently to many members of congress, it makes complete sense to not vote on the one thing everyone agrees on, and instead to wait and talk about it in conjunction with a whole litany of other issues that very few agree on.
In Washington, we call that a punt.
“Comprehensive tax reform” will likely be on the docket in 2017 when the next Congress is called to order.
Who will be at the negotiation table? You guessed it – Mike Sommers.
That’s part of his big new job.
The one that’s going to cost our country $180 billion.
We’re going to keep you posted on what Mr. Sommers and the PEGCC are up to, because it is our mission to make sure that the wealthy and powerful no longer get to operate in the shroud of secrecy in order to protect their tax breaks.
And tell your friends about this. It’s truly outrageous, and we can fix it.
