Anti-business policies lead to anti-profit results.

Private equity and hedge fund management firms like the Blackstone group are going public, meaning financial reports must be filed with the Securities and Exchange Commission.

Fund managers must report the numerical value of their piece of the pie. Thus, members of Congress – whose congressional salaries are paid by governmental leeching known as “taxes” – are now seeing how much principals make and want to take more for themselves.

The anti-wealth camp is so flabbergasted that people can make money honestly – that is, not getting paid for initiating force upon others – that they deem the production of large sums of income sans baby-kissing and environmentalist infotainment to be unfair. Hedge funds are now boogiemen akin to Wal-mart in the populist saga now taking place on Capitol Hill.

This witch hunt not only hurts managers of said funds but America as a whole, as these developments reflect a shift in America’s political climate to one that is decidedly anti-business.

Legislation introduced Friday would tax some hedge funds and similar private equity funds’ profits at the income tax rate of 35 percent, rather than the current capital-gains tax of 15 percent. The New York Times reported that the Dow Jones Industrial tanked that day, likely due in part to this news.

Such a shock in the market is hardly a random blip. Financiers have been saying for some time that New York is losing its dominance as a world financial center. According to Newsweek, the financial section of London, The City, is experiencing a boom, possibly fueled by the icy business climate in the United States. One article explains: “Not only did London overtake New York as the market of choice for international IPOs (Initial Public Offerings), but Europe (led by London) surpassed the United States in terms of the value of all new listings in 2005.”

Many assume this is due in large part to Sarbanes-Oxley, a set of corporate regulations enacted in the United States following the Enron scandal, which has made going public – offering shares – prohibitively costly because of the financial resources required to comply with red tape.

Moreover, as reported by the Financial Times, even the Government Accountability Office has admitted that “Sarbox” was acting as a disincentive to a company’s going public.

In other words, because it’s such a pain to comply with Sarbox, companies are less likely to offer shareholders – rich and poor alike – the ability to profit from their success. Many companies are reported to offer private offerings to avert cumbersome Sarbox requirements, “leaving profits from smaller firms in the exclusive possession of private-equity players,” according to U.S. Treasury Secretary Henry Paulson.

Once again, interventionism, in its infinitesimal boneheadedness, has taken away an opportunity for Americans to make money.

What is the total cost of compliance? Bloomberg News cites two studies that drive the point home: Sarbox is estimated to have cost $6 billion in 2006, and 23 out of 25 of the largest public offerings chose not to be listed in U.S. exchanges in 2005.

Some may argue that fund managers do not pay their fair share because the percentage of taxes they pay is significantly less than the percentage paid by people who earn less money, making the current system inequitable and unfair.

Yes, the current system is indeed “unfair” – in the sense that it tries to burden everyone when not everyone benefits or uses government programs equally. I say, if fairness is the issue,

what would be fairer than a system in which the users of services pay for them? If such a system existed, then the tax code wouldn’t need the constant tinkering that adds more “wrongs” to the inherently wrong equation of income tax itself.

If America wants to remain competitive, it must reform or void altogether the cumbersome laws that keep profits down and drive investment opportunities elsewhere. As hardworking and entrepreneurial as Americans may be, an economy cannot survive on effort alone. Rather, it must have a legal framework that protects individuals without simultaneously hampering them.

Victoria Bekiempis is a junior majoring in history and French.