This week, the Senate is debating its version of the tax extenders bill that the House passed before the Memorial Day recess. The bill extends unemployment benefits through November (as well as some popular tax credits) and is partially offset by the closing of a few tax loopholes.

One of these loopholes has to do with carried interest, or the money that investors pay to money managers to manage hedge funds or private equity firms. Currently, such income is taxed at the lower capital gains rate, even though it is received in return for a service like any other salary or hourly wage. The Senate has, for a week now, been watering down the tax change (suggesting subjecting only 50 or 60 percent of carried interest to the higher tax rate), in an attempt to drum up conservative votes.

But Sen. Orrin Hatch (R-UT) today took to the Senate floor to proclaim that he would vote against the extenders package — and thus prevent millions of Americans from claiming unemployment benefits — because of the tax change, and dared the world to fight his analysis:

Why, then, am I planning to vote against this bill?…It is for the same reason that much of the business community is opposed to this legislation. The tax increases added to this bill will damage the economy and job creation and outweigh the benefits of extending the expired tax provisions [...]

For several years now we have heard it stated with outrage that hedge fund managers get by paying a lower tax rate on their billion dollar compensation packages than their secretaries pay on their relatively meager salaries…The simple fact is that if we increase the tax rates and change the nature of income for these partnerships, the economic hurdle rates will rise and fewer deals will get done. And if fewer deals get done, less economic activity will be generated and fewer jobs will be created. I don’t think anybody can fight that analysis.

Watch it:

Of course, plenty of people have already fought that analysis, pointing out that investors will not be affected by the change, only the wealthy managers they employ to oversee their investments.

But since Hatch is so concerned about venture capitalists shutting down their shops if the change comes to pass, I’ll turn it over to Fred Wilson, who is a venture capitalist, and wrote that “changing the taxation of the managers will not reduce the amount of capital going to productive areas”:

The sources of the capital; wealthy families, endowments, pension funds, and the like, will still put the capital in the places where they will get the highest after tax return. And these sources of capital, if they are tax payers, will still get capital gains treatment on their investments in hedge funds, buyouts, and venture capital. And the fund managers will still have to compete with each other to get access to that capital and their incentives will still be to produce the highest returns they can produce, regardless of whether they are paying capital gains or ordinary income on their fees.

As David Weidner pointed out (in the Wall Street Journal, of all places), “Wall Street’s private equity industry is going Tea Party on a new tax making its way across Capitol Hill. But don’t be fooled, this isn’t a populist movement, unless your brand of populism includes a dozen vacation homes.” Zaid Jilani also noted that opponents of the increase are making all sorts of outlandish claims about it, including that it will harm cancer patients. But taxing carried interest for what it is — income — is simply about fairness and fixing a bizarre inequity in the tax code that has no reason for existing.

Late last month, Mississippi state House Speaker Billy McCoy (D) and Lt. Gov. Phil Bryant (R) created a select committee to investigate the Gulf Coast oil spill. “[T]he people of Mississippi deserve to know how this happened and what the future may hold for this most valuable part of our state,” said McCoy. A key part of the select committees’ mission would be to hold hearings with top officials from companies responsible for the spill.

However, yesterday, BP wrote a letter saying it wouldn’t be showing up for the three-day hearings this week. ThinkProgress obtained the letter to McCoy, addressed from Margaret D. Laney, BP’s Mississippi Coordinator for Public and Government Affairs. From the letter:

I regret that we are unable to accommodate your invitation to participate Wednesday or Thursday in the hearing of the Mississippi House of Representatives Select Committee on the Gulf Coast Disaster.

We at BP take very seriously the desire of the Select Committee to gather information on the circumstances on the Mississippi coast relative to the oil spill. We are committed to meeting regularly with stakeholders along the Gulf Coast and to providing briefings for government officials on a regular basis, and we will continue to remain engaged in this way. When we meet with the Committee, it will be important for us to have appropriate BP representatives who are implementing the strategic response plan for Mississippi and working in the Mississippi Gulf Coast area. Unfortunately, the appropriate individuals are not available this week. We would be pleased to work with the Select Committee to identify a day in the near future for another meeting of the Committee — either in Jackson or on the Coast where the Committee also can visit incident response operations.

A BP spokesperson told the AP that the “many of the company’s executives” would be in Washington, DC. According to the Biloxi Sun Herald, both Transocean and Halliburton were also no shows.

McCoy was suspicious of the corporations’ refusal to testify, stating, “Considering the many officials BP has on standby in the Gulf Coast region, it is simply incomprehensible that the company could not send at least one to these hearings to give our citizens, lawmakers and business leaders their viewpoint on this oil spill disaster. We are not holding these hearings to conduct a witch hunt.” “Every one of BP’s public pronouncements has been as produced and careful as the Tiger Woods’ apology,” Rep. Brandon Jones (D) added. “What we want is for them to answer the hard questions and give us a sense of what is going on. By not showing up, it just leaves all that to our imagination and it breeds frustration.”

The last hearings BP, Halliburton, and Transocean officials attended didn’t go so well because they were all trying to pass blame for the spill and received widespread condemnation. The Washington Post noted that at last month’s Capitol Hill hearings, senior executives were “pointed fingers” at each other the whole time.