Rick Santelli can get on the Obama administration's case by ranting on television. But the administration can get on Rick Santelli's case by changing the tax code! On page 110 of the administration's tax green book (pdf) -- the detailed explanation the administration's tax plans, which came out yesterday -- there is a small provision that would end preferential tax treatment for certain derivatives and commodities traders, like Santelli and his friends on the floor of the Chicago Mercantile Exchange. The proposal:


would require commodities derivatives dealers, dealers in securities and dealers in equity options and commodities and to treat the income from their day-to-day dealer activities as ordinary in character, not capital.

Why does this matter? According to the green book, certain commodities and securities dealers are allowed to pay a blended capital gains rate on some portion of their income. (The capital gains rate is lower than the rate on regular income.) If this proposal passes that would end.

The green book argues that "There is no reason to treat dealers in commodities, commodities derivatives dealers, dealers in securities and dealers in equity options differently than dealers in other types of property. Dealers earn their income from their day-to-day dealing activities and should be taxed at ordinary rates."

(And no, I don't actually think the White House had Santelli in mind when they added this proposal. It seems legit. But it should give Santelli something else to complain about.)