Success sometimes breeds envy, and the success of American business is breeding envy in Congress. Just consider executive compensation and the tax treatment of capital gains.

Under current law, shareholders of publicly traded companies may sponsor any type of nonbinding resolution, including resolutions on executive compensation. The AFL-CIO and other groups have successfully promoted such votes partly to limit large pay packages and perhaps partly to gain leverage in union contract negotiations.

For example, Verizon shareholders recently deadlocked, 47% to 47%, on a nonbinding resolution as to whether CEO Ivan Seidenberg’s compensation of about $20 million annually is too generous. Never mind that Verizon equity increased in value by about a third over the past 12 months. Never mind that Mr. Seidenberg’s compensation would not raise an eyebrow on the roster of most professional sports teams. Never mind that disgruntled shareholders can express their dissatisfaction in any number of ways, from selling shares to ousting board members — including the CEO — to holding nonbinding resolutions. Never mind that Mr. Seidenberg’s compensation is only 0.02% of Verizon’s budget; Verizon shareholders have no resolutions regarding the details of the remaining 99.98%.

In practice, boards and compensation committees of public corporations take extraordinary care in aligning management incentives with those of shareholders. Most public firms are far less successful than Verizon and pay their CEOs accordingly. Given a choice of: (1) keeping their current officers, compensation, and market capitalization; or (2) switching to Verizon’s officers and its multibillion-dollar increase in market capitalization together with Mr. Seidenberg’s compensation, many firms would gladly take the Verizon package. If Verizon is mismanaged, competitors rather than pay package resolutions will discipline the company.

Senator Obama, a Democrat of Illinois, recently introduced legislation to force publicly traded corporations to require shareholder votes on nonbinding resolutions on executive compensation. Of course, shareholders would not be required to vote on capital budgeting decisions or new bond issues or — perhaps most curiously — new union contracts of the sort that the AFL-CIO is negotiating with Verizon, among other companies.

The movement to review executive pay undermines corporate board structures generally. Mr. Obama and others appear to trust boards of public corporations to make reasoned decisions on a wide range of issues necessary to guide a corporation, except for executive compensation.

Mr. Obama’s legislation may not become law, but it reflects a broad pattern of new laws and regulations over the past six years that are raising the costs of remaining a public corporation. Each time Congress imposes new costs on publicly traded corporations, the reasons to remain public diminish. Many such firms are opting to switch to private ownership, and investors are following suit.

Where money flows, Congress is not far behind. Concerned that a few private equity partners earn hundreds of millions of dollars annually, the House Ways and Means Committee and the Senate Finance Committee are considering legislation to change the taxation of capital gains in such a manner as to disadvantage partners in private equity firms. Raising capital gains taxes could easily harm investments in America, unacceptable collateral damage in Congress’s quest to soak the rich.

Money shifts to private equity not for beneficial tax treatment but because private equity funds tend to be well managed and the broader legal and regulatory treatment of publicly traded corporations is all too punishing. If a private equity firm earns an extraordinarily high return, competing private equity firms bidding down the profits, rather than new tax laws, will most effectively provide financial discipline.

The Internal Revenue Service is collecting record tax revenues. Despite the best efforts of Congress to spend money faster than Americans can pay taxes, taxpayers appear to be winning this dubious race. The budget deficit is shrinking. Our problem is not that taxes are too low and have too many loopholes; if anything, taxes remain too high and only encourage more wasteful government spending.

Congress’s approach to laws and taxation governing Corporate America is guided more by envy than by sound economic policy. Rather than broadly seeing financial institutions as the engine of American growth creating prosperity that benefits all Americans, Congress focuses on the enormous compensation accumulated by a few individuals. Billions of people see American wealth and seek to emulate our financial success. Sadly, too many in Congress see this wealth and seek to destroy it.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He is organizing the seminar series at the Hudson Institute. He can be reached at hfr@furchtgott–roth.com.