President Bush today made his first public comments on the carried interest tax debate, during a morning press conference. Other White House officials — including Tony Snow and Hank Paulsen — had previously indicated the president’s opposition to changing carried interest tax treatment from capital gains to ordinary income, but the bossman had stayed mum. Here’s the transcript:
Question: What about carried interest? Do you think taxing those at capital gains is fair? A lot of people think it’s not.
Bush: First of all, I think that what ends up happening is that in trying to deal with one particular aspect of partnerships is that you end up affecting all partnerships, and partnerships are an important vehicle to encourage investment in capital flows. They’ve been important vehicles to encourage the entrepreneurial spirit and many small businesses have been organized as limited partnerships.
So we’re very very hesitant about trying to target one aspect of limited partnerships for fear of the spillover it will have in affecting small business growth. And so we don’t support that.
As for larger economic issues, Bush didn’t seem terribly concerned or even curious. He stressed job growth and “strong fundamentals,” and said that the housing market is heading for a “soft landing” rather than a crash.