Letter: Why US cam­paign fin­ance laws badly require reform

Ant­oine Gara (“Private equity avoids high taxes on $1tn of fees amid fury over ‘absurd loop­hole’”, Report, June 14) reminds us that all recent American pres­id­ents have vowed to end the spe­cial tax treat­ment of buy­out man­agers’ fees — where actual income is treated as lower-taxed capital gain — but ulti­mately have retreated in face of industry pres­sure.

In the 1980s, when Big Pharma fielded two lob­by­ists for every mem­ber of Con­gress (it now has about three), it set about to elim­in­ate the pro­hib­i­tion on advert­ising pre­scrip­tion drugs, a pro­hib­i­tion that every west­ern European demo­cracy still retains. Even Chuck Schu­mer, a lib­eral who is Demo­cratic leader in the Sen­ate and might be expec­ted to vig­or­ously oppose this Big Pharma vic­tory — and Big Fin­ance’s vic­tor­ies in get­ting the hein­ous “car­ried interest loop­hole” enacted — always retreats under this “industry pres­sure”.

I believe that we can never reduce our Gini index of inequal­ity (the highest of any demo­cracy) until we reform our cam­paign fin­ance laws so that it is no longer pos­sible for power­fully rich eco­nomic sec­tors to buy politi­cians — the com­mon­weal be damned.

Stan­ley M Gur­al­nick
Retired His­tor­ian and Banker
Boulder, CO, US