Most international investors say a tax break allowing private equity and hedge-fund executives to pay lower tax rates than many average Americans isnt warranted, according to a Bloomberg survey.
As the release of Republican presidential candidate Mitt Romneys 2010 tax return heats up debate over a 15 percent top rate on so-called carried interest, two-thirds of those surveyed in the Bloomberg Global Poll say the tax break is unjustified. The lower levy helped Romney, former head of Bain Capital LLC, pay an effective rate of 13.9 percent on $21.6 million of income, when the top income tax rate is 35 percent.
Jonathan Sadowsky, chief investment officer at Vaca Creek Asset Management LLC in San Francisco, said he favors eliminating the break because hes concerned about government deficit spending.
Im extremely worried about the debt, he said. Somewhere down the line, people are going to stop lending us money.
About $7.4 million, more than one-third of Romneys 2010 income, was from carried interest, which is the share of profits that make up most of the compensation for partners in private equity firms, hedge funds and real estate developments. Those fees are taxed as capital gains rather than ordinary income.
Sixty-six percent of poll respondents worldwide said the break isnt justified, compared with 21 percent who said it is and 13 percent who said they had no idea. Among those living in the U.S., 67 percent said the lower rate isnt justified, versus 27 percent who said it is. The Jan. 23-24 poll of 1,209 investors, analysts and traders from around the world has a margin of error of plus or minus 2.8 percentage points.
Romney Tax Break Rejected as Welfare for Rich in Investor Poll - Bloomberg
As the release of Republican presidential candidate Mitt Romneys 2010 tax return heats up debate over a 15 percent top rate on so-called carried interest, two-thirds of those surveyed in the Bloomberg Global Poll say the tax break is unjustified. The lower levy helped Romney, former head of Bain Capital LLC, pay an effective rate of 13.9 percent on $21.6 million of income, when the top income tax rate is 35 percent.
Jonathan Sadowsky, chief investment officer at Vaca Creek Asset Management LLC in San Francisco, said he favors eliminating the break because hes concerned about government deficit spending.
Im extremely worried about the debt, he said. Somewhere down the line, people are going to stop lending us money.
About $7.4 million, more than one-third of Romneys 2010 income, was from carried interest, which is the share of profits that make up most of the compensation for partners in private equity firms, hedge funds and real estate developments. Those fees are taxed as capital gains rather than ordinary income.
Sixty-six percent of poll respondents worldwide said the break isnt justified, compared with 21 percent who said it is and 13 percent who said they had no idea. Among those living in the U.S., 67 percent said the lower rate isnt justified, versus 27 percent who said it is. The Jan. 23-24 poll of 1,209 investors, analysts and traders from around the world has a margin of error of plus or minus 2.8 percentage points.
Romney Tax Break Rejected as Welfare for Rich in Investor Poll - Bloomberg