Today's Times includes an op-ed by Lynn Forester de Rothschild about the taxation of carried interest that includes several factual errors that seem worthy of correction. She writes:
The difference in revenue to the United States government when this combined income is taxed at 20 percent rather than at 39.6 percent is about $11 billion annually. Indeed, the Real Estate Roundtable, a leading industry lobbying group, puts the estimate even higher, at $13 billion — $5 billion in real estate alone.
These revenue estimates for increasing taxes on carried interest seem way off base. A recent Huffington Post article cited Treasury Department estimates on the tax change at $1.3 billion in in 2013, and "about $13.5 billion over the next decade." The news columns of the Times itself reported last month that "Changes to the treatment of carried interest could bring in $17 billion over 10 years, according to Congressional estimates." It looks like Ms. Forester de Rothschild is mixing up ten year estimates with annual estimates. In other words, she's off by a factor of about ten.
Second, she writes, "While the tax legislation passed on Jan. 1 increased the top individual-income tax rate to 39.6 percent from 35 percent for couples making more than $450,000 and individuals making more than $400,000, it left carried-interest income taxed at just 20 percent." That "twenty percent" understates the capital gains rate for many earners of carried interest subject to the new top individual income tax rate. In fact, once you add in the 3.8% ObamaCare tax and state and local taxes, capital gains rates reportedly reach as high as 33% in California and 31.4% in New York.
There are all kinds of other conceptual errors in the article, starting with the basic assumption that it's somehow a "government handout" to allow people to keep money that they earned. But these two are just basic factual errors that deserve correction if one believes that a person is entitled to her own opinion, but not to her own facts.