Originally Posted by Relentless

In theory, if 'anyone' can create a hedge fund and treat their earnings as something other than earnings, it is a loophole 'available to everyone.' However in reality, everyone can't go out and start their own investment bank to take advantage of the reduced tax rate, so it isn't actually 'available to everyone.' The same is true with long term capital gains and other investment 'options' that are not truly available to everyone. Your false distinction between earnings and investments has no bearing on the discussion of whether or not they are 'available to everyone.'

Functionally a 'loophole available to some' is no different than an 'investment income device' available to some. If you favor a flat tax rate and a sales tax, the loopholes and investment income advantages that some have will all go away.