Bracket Creep

Here’s Bruce Bartlett:

In short, it is a pipe dream to believe that eliminating the capital gains preference is the key to fixing the carried interest loophole. It can and should be addressed by treating carried interest as ordinary income, without requiring that all capital gains be taxed as ordinary income.

via Bruce Bartlett: Mitt Romney, Carried Interest and Capital Gains – NYTimes.com.

I might put it a little bit differently: the problem is not the capital gains preference, but that too many people get the capital gains preference for labor income.