June 17, 2010
Most of us know that lobbyists sometimes argue positions for their clients that they don’t really believe. They do this because they are paid lots of money by their clients. The same applies to the politicians who often repeat the lines given them by lobbyists, whether or not they believe them.
The fact that lobbyists and politicians are not always truthful apparently would be news to the Post. It began an article on lobbyists’ efforts to block the elimination of a tax break for hedge funds and other special partnerships by telling readers:
“Their [the lobbyists’] worry: That Congress had vastly underestimated the impact that the measure would have on partnerships, one of the primary ways U.S. investors raise capital to invest in businesses and real estate.”
While it may actually be the case the lobbyists are concerned that closing this tax break will impair capital formation in the United States, it is also possible that the lobbyists could not care less about capital formation and this was just the best line that they could find to try to prevent the elimination of a tax break that could cost their clients billions of dollars in the next decade.
If the lobbyists argued that their wealthy clients should not have to pay the same tax rate as ordinary workers (as would be the case if the tax break is eliminated), they would probably find little sympathy from the general public. Therefore, they must find some argument about how eliminating this tax break will hurt the economy, no matter how fallacious it might be. Reporters should be aware of this fact.
The article commits the same error near the end when it told readers:
“Some moderate Democrats have worried that the partnership-sale and carried-interest tax increases would hurt the venture capital industry.”
The reporter of course does not know what has actually “worried” moderate Democrats. The reporter can only know what the moderate Democrats claim has worried them. The moderate Democrats would be unlikely to say that they get large campaign contributions from venture capitalists and therefore are working to keep their taxes from rising. They would likely claim to be concerned about the health of an important industry even if they were just doing favors for campaign contributors.
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