Obama to Tax Rich for

They'll take their money and their business elsewhere which is exactly what the left has been bitching about. We have the 2nd highest corporate tax in the world, yet you all scream to tax them even more and at the same time scream about companies relocating. It's an amazing display of stupidity or lack of education and common sense.

This would be nice. If it were true.

The stated marginal corporate tax rate is amongst the highest in the world. The effective marginal corporate tax rate is amongst the lowest in the world.

Fact is, though our tax laws include statutory rates that are fairly high (35% for corporations earning about $18 million or more annually) but generally in the same ballpark as those of other developed western nations, the actual tax rates paid by US corporations are extraordinarily low, around 6%. Remember the latest GAO report (reported elsewhere on ataxingmatter) that shows that two-thirds of US corporations pay no federal income tax. That's not just the ones that are losing money, but also many corporations that have record high profits (including some Big Oil companies) that end up paying next to nothing in taxes.

ataxingmatter: Tax Foundation and Competitive Environments: more bunk!

If it were also true that corporate taxes are the primary driver of corporate behavior, Silicon Valley would be located in a low-tax state like Mississippi, not a high-tax state like California.
 
btw, i read that more than 95% of small/individual businesses in this country DID NOT NET $250k in taxable income....
 
you may be correct, no one has a crystal ball. I certainly am not going to take Obama's word for it. I get tired of people saying the tax cuts were for the rich, especially when you look at the lower brackets. Their percentages went WAY down. but the democratic candidates get up there and say the tax cuts were for the rich and everyone believes them.

Well, honestly, the Bush tax cuts did not help my husband and I that much....since i retired young we are only pulling in lower, middle class income to live off of....but we own our house outright, so this is possible....

so we were in the middle of the 15% tax bracket, the ONLY tax bracket to not get a full tax rate cut for the entire income bracket....it only gave us an income tax break for the first $6k of our income or so, reducing that income only to a 10% tax rate....from the 15%, the rest of the income in that 15% tax bracket, continued to be taxed at the 15% rate.

My husband and I were never able to have children so we did not benefit from any of the tax cuts and tax credits given to people with children, or the tax breaks for children in college...or anything like that....those of us without children, pay a great deal more in taxes on our income than those of you that do have children....that's just a fact of life...

add property taxes to pay for schools that we will never have children attend is another added tax to us, with no immediate benefit...but it allows those of you with children to pay less in property taxes than you would if we were not taxed for your children's schooling by the States....

I accept all of these taxes as my responsibility as an American though, so I am not really bitching about such in the sense that i don't want to pay them, but essentially every single couple out there who were not able to have children or just didn't have children, FUND your children if you have any....a distribution of our wealth, to you with children...via tax breaks given to you and not to us.

Care



And you're going to lose what you received from the Bush tax cuts in 2010. Guaranteed.

I didn't get much to lose my friend, and this is what i was stating above....no children, no huge tax savings for the middle, to lower middle class....

But it will be a kiss of death to any politician not continuing these child tax breaks for the middle class and they will continue with them....there is NO DOUBT with me on that....no question at all....they are no fools when it comes to securing their jobs, everything else they do, is all together different.

no need to fear on that...in my opinion.
 
Oh no, taxing the rich for healthcare. What a tragedy. What an authoritarian and communistic thing to do.

I guess you guys are all in danger, huh? You know, being so wealthy and all...
 
We have one of the LOWEST EFFECTIVE CORPORATE TAX RATE, in the world...yes our corporate tax rates seem high on the surface,

but their effective rates, the rates that these corporations actually pay after they take all of their deductions and write offs and credits comes out to some of the lowest corporate tax rate in the westernized world.

Who's "they" on your comment above btw? The hedge fund managers? are you saying they will leave our stock market and go somewhere else?

I think not....on that!

Care

That's a load of "crock". I am a small-business person & have been in business for over 30 years. Of course, business expenses are deductible. This is the cost the business owner expenses out in order to keep the business running--"like payroll for employees", payroll taxes, equipment, tools, insurance, etc.

But if the bottom line after all of these normal "business expenses" are deducted--there are no such thing as "credits'. All "net" business income goes back to the owner of these business's to pay taxes on. If the owner made "after all of these normal business deductions" 250K--they will be penalized into a 40% income tax bracket--PERIOD. On the bottom line, small business, typically sub-S corporations are taxed in the same manner as you, the employee of said company.

This policy is anti-incentive for small business in this country, to take further risks, further headaches, to hire & grow their businesse's.

There is no 40% INCOME TAX bracket? Please explain oreo?

If your small business NETS 250K of taxable income and this is done on your income taxes because as the owner, you chose not to reinvest that money in to the company and take it ALL as your income, you would be taxed at income tax rates for each segment of your income that fits in to the other tax brackets below you...

only the money, over and above you and your wife's $250K net taxable income, would be taxed $700 bucks more for every $10k extra you claim in taxable income if it goes back to clinton tax levels, is what the article stated in the beginning of this thread.

It is my understanding that the tax brackets with the Bush lower taxable rates would stay in effect, and only the rate that covers what you make in net taxable income ABOVE THE $250K, is where you will be taxed at a higher rate....

So if your net taxable income from your business, that you decided to keep for your family instead of the business, is $270k, then your taxes will go up $1400 dollars on the EXTRA 20K that you netted...

at least this is my understanding of our tax code.

care

Sorry--I rounded off 39% to 40%. 39% is Barack Obama's new tax policy. (250k involves "small business--honest very hard working people in this country!) In fact, still the largest employer in this country. Not just hedge fund master minds of deceit--or Wall streeters who broke the bank.

There is no discrmination in this tax policy It's like this government is telling small business to work harder, invest more, take on more risks so they can launch themselves into a 40% tax bracket.

This is what I am talking about. It's a tax policy that is anit-incentive for small business in this country to grow. Small business gets no "credits"--they pay taxes on their income "after business deductions" just like an employee does.
 
btw, i read that more than 95% of small/individual businesses in this country DID NOT NET $250k in taxable income....


And they're NOT going to make any effort of crossing that bar either.

BTW--there are many small business'es in this country that in fact do make more than 250K. I imagine they'll be laying off hired workers to pay for their new 40% tax bill. Employees are "always" the first cuts that are made to make up for tax expenses.
 
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btw, i read that more than 95% of small/individual businesses in this country DID NOT NET $250k in taxable income....

define small.

I find that difficult to believe. Not doubting you, but rather the source.
 
That's a load of "crock". I am a small-business person & have been in business for over 30 years. Of course, business expenses are deductible. This is the cost the business owner expenses out in order to keep the business running--"like payroll for employees", payroll taxes, equipment, tools, insurance, etc.

But if the bottom line after all of these normal "business expenses" are deducted--there are no such thing as "credits'. All "net" business income goes back to the owner of these business's to pay taxes on. If the owner made "after all of these normal business deductions" 250K--they will be penalized into a 40% income tax bracket--PERIOD. On the bottom line, small business, typically sub-S corporations are taxed in the same manner as you, the employee of said company.

This policy is anti-incentive for small business in this country, to take further risks, further headaches, to hire & grow their businesse's.

There is no 40% INCOME TAX bracket? Please explain oreo?

If your small business NETS 250K of taxable income and this is done on your income taxes because as the owner, you chose not to reinvest that money in to the company and take it ALL as your income, you would be taxed at income tax rates for each segment of your income that fits in to the other tax brackets below you...

only the money, over and above you and your wife's $250K net taxable income, would be taxed $700 bucks more for every $10k extra you claim in taxable income if it goes back to clinton tax levels, is what the article stated in the beginning of this thread.

It is my understanding that the tax brackets with the Bush lower taxable rates would stay in effect, and only the rate that covers what you make in net taxable income ABOVE THE $250K, is where you will be taxed at a higher rate....

So if your net taxable income from your business, that you decided to keep for your family instead of the business, is $270k, then your taxes will go up $1400 dollars on the EXTRA 20K that you netted...

at least this is my understanding of our tax code.

care

Sorry--I rounded off 39% to 40%. 39% is Barack Obama's new tax policy. (250k involves "small business--honest very hard working people in this country!) In fact, still the largest employer in this country. Not just hedge fund master minds of deceit--or Wall streeters who broke the bank.

There is no discrmination in this tax policy It's like this government is telling small business to work harder, invest more, take on more risks so they can launch themselves into a 40% tax bracket.

This is what I am talking about. It's a tax policy that is anit-incentive for small business in this country to grow. Small business gets no "credits"--they pay taxes on their income "after business deductions" just like an employee does.





now what does the grand total come to when a business has to add on the State Tax to obamalama's Federal Tax..
 
There is no 40% INCOME TAX bracket? Please explain oreo?

If your small business NETS 250K of taxable income and this is done on your income taxes because as the owner, you chose not to reinvest that money in to the company and take it ALL as your income, you would be taxed at income tax rates for each segment of your income that fits in to the other tax brackets below you...

only the money, over and above you and your wife's $250K net taxable income, would be taxed $700 bucks more for every $10k extra you claim in taxable income if it goes back to clinton tax levels, is what the article stated in the beginning of this thread.

It is my understanding that the tax brackets with the Bush lower taxable rates would stay in effect, and only the rate that covers what you make in net taxable income ABOVE THE $250K, is where you will be taxed at a higher rate....

So if your net taxable income from your business, that you decided to keep for your family instead of the business, is $270k, then your taxes will go up $1400 dollars on the EXTRA 20K that you netted...

at least this is my understanding of our tax code.

care

Sorry--I rounded off 39% to 40%. 39% is Barack Obama's new tax policy. (250k involves "small business--honest very hard working people in this country!) In fact, still the largest employer in this country. Not just hedge fund master minds of deceit--or Wall streeters who broke the bank.

There is no discrmination in this tax policy It's like this government is telling small business to work harder, invest more, take on more risks so they can launch themselves into a 40% tax bracket.

This is what I am talking about. It's a tax policy that is anit-incentive for small business in this country to grow. Small business gets no "credits"--they pay taxes on their income "after business deductions" just like an employee does.





now what does the grand total come to when a business has to add on the State Tax to obamalama's Federal Tax..

I would imagine if you added in for state taxes on top of the 40% federal income tax bracket one making 250K per year is probably donating 50% of their income to taxes.

Let's not forget city taxes. Many cities in this country also have an income tax liability.
 
A GOOD ANALOGY--AS FOR THE DIFFERENCE BETWEEN A LIBERAL & A CONSERVATIVE:

"While liberals typically concern themselves about the distribution of the "golden eggs" that the Golden Goose produces--Conservatives are typically more concerned about the health of the Golden Goose."



"The problem with socialism, is that eventually government runs out of other people's money to spend." Margaret Thatcher.
 
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raising taxes on the rich to the level of the prosperous clinton years, to pay for health care for all americans?

Oh, the horror!

I don't care if we raise of lower them

AS LONG AS

1) Everyone pays the same percentage burden
2) We eliminate loopholes
3) We cut pork and unnecessary government spending (no more research into pig stink, go-kart parks, etc on the taxpayer dime).. make a law that it is illegal unless the governmental budget is in the black
4) Have efforts to eliminate or SEVERELY LIMIT any earmarks on bills (if you can't eliminate, limiting them to a limit of 1/100th of 1% of the spending proposed in the basis of the bill)
5) We start eliminating all government welfare handouts to corporations AND individuals
6) We eliminate invisible back door spending (grabbing from the SS fund and other intra governmental 'magic spending')

That's a good start

But if you want healthcare for your non-public-domain body... pay for it your fucking self


Man, what the F are you talking about? Why do rightwingers feel the need to rush to the defense of poor downtrodden rich people?

The rich are, and probably will into the foreseeable future, already paying a lower tax rate than the rest of us working schmucks. Why do you continue to labor under the impression that we need to skew the tax code to be "fair" to the rich? The income tax in only one form of tax, and slightly adusting the top marginal rate" on the income tax will have virtually no impact on Warren Buffet or Paris Hilton. They don't get wealthy off of wages. Wages are for working schmucks. Their wealth comes from investment income, which is already taxed at a generally lower rate than wage income. And most of their income is exempt from payroll tax, and if republicans had their way the rich would be paying zero tax on inheritance income and dividends income.

If anything, raising the taxes on the rich would be fair to working people.. It would make the rich as accountable on tax liability as the rest of us.

What the F are you talking about?

Did I say different tax rates? Nope... I have stood for taxing all income the same... whether it be from a punched time card, interest, etc

And it is not about pandering to the rich... but having each and every last person taxed at the same exact rate on every dollar earned... elimination of loopholes which allow 'creative' people to effectively lower their tax rate, etc... I earn 100K and the tax rate is 20%, I pay 20K... you earn 10K at Starbucks, you pay 2K.. each pays the exact same on every earned dollar from that year

As for inheritance... it has already been taxed... a death tax is absolute bullshit... if I leave 250K for my kids that I have already invested and paid taxes on in earning the interest or whatever, there is no logical reason why THEY should be taxed on it again

You see.. unlike you lefties who scream about equality.. I promote every aspect of equality.. instead of selective ones that only benefit 1 demographic of voters... and with that equality comes the positives AND negatives from that equality and equal treatment
 
Oh no, taxing the rich for healthcare. What a tragedy. What an authoritarian and communistic thing to do.

I guess you guys are all in danger, huh? You know, being so wealthy and all...
Would it not be smarter, and 100% more effective, to demand the cost of health care be reduced, rather then force people to carry someone else's load?

I can't see why a company can make people pay 10 to 100% more for a pill then what they would pay in Canada for example.

How are hospitals getting away with charging thouasands for one day in a bed, hundreds for a ride in an ambulance?

This is the real reason we have a 'crisis' in health care, an artificial business inserted itself into the mix, INSURANCE COMPANIES.

Get them the hell out of the health care business and costs will drop dramatically.
 
Here's the thing - throughout US economic history, growth has been fairly constant regardless of the rate of tax. And you would expect it to be. Does anyone really believe that the wealthiest people in the world are going to stop working if their highest rate of marginal tax rises from 35% to 40%? Do you really believe that Bill Gates or Steve Jobs or Warren Buffett is going to say, "Well, I made $100 million last year, but with the tax rates up 5%, I'm only going to make $95 million this year, so I'm not going to work hard?"

I find this argument grossly underestimates the industriousness and ingenuity of the American people. America is not the wealthiest country on the planet because its marginal tax take is 6.5% less than the OECD average. It became the richest country on the planet because of the characteristics of the American people.

Yes, taxes can be too high. Yes, lower taxes are better. But some of the things people say are just silly.

BTW, one of the proposals in the budget is that what is known as carried interest of private equity and hedge funds will be taxed at the normal marginal rate of income. Carried interest is the fees these funds charge as a percentage of profits. For some reason I do not understand, carried interest has been deemed "capital gains" - even though it is not the fund manager's capital that is at risk - and thus taxed at the rate of capital gains, or 15%. Since the vast majority of a fund manager's earnings comes from carried interest, that means the marginal rate of tax for the fund manager is around 15%. In other words, you are taxed at a higher rate if you made $50,000 than a private equity or hedge fund manager who made $500,000,000.

Is anyone here willing to defend this as some unjust tax on rich people?

They'll take their money and their business elsewhere which is exactly what the left has been bitching about. We have the 2nd highest corporate tax in the world, yet you all scream to tax them even more and at the same time scream about companies relocating. It's an amazing display of stupidity or lack of education and common sense.

We have one of the LOWEST EFFECTIVE CORPORATE TAX RATE, in the world...yes our corporate tax rates seem high on the surface,

but their effective rates, the rates that these corporations actually pay after they take all of their deductions and write offs and credits comes out to some of the lowest corporate tax rate in the westernized world.

Who's "they" on your comment above btw? The hedge fund managers? are you saying they will leave our stock market and go somewhere else?

I think not....on that!

Care

Yes, I've heard all about the 'effective' tax rates, could you give me an example of a 'big, evil corporation' whose 'effective' tax rate actually ended up being significantly lower than what the corporate tax rates are actually listed to be? And another thing that puzzles me is why liberals are not currently holding your politician's collective feet to the fire over all of these lovely tax deduction and credits that these evil corporations are getting? I mean, after all, who is in charge of the tax code right now? Why that would be the majority democratic/liberal congress. Why do they stand up and bitch about the 'rich' not paying their fair share of taxes, creating class envy by pretending to stand up to the big evil corporations, yet at the same time they do nothing about all of these deductions and credits that the lobbyists are paying them to keep in the tax code? You people that think the liberal politicians are any less in bed with the 'rich' in this country or the corporations than any conservative politican are total fools in my opinion.
 
Here's the thing - throughout US economic history, growth has been fairly constant regardless of the rate of tax. And you would expect it to be. Does anyone really believe that the wealthiest people in the world are going to stop working if their highest rate of marginal tax rises from 35% to 40%? Do you really believe that Bill Gates or Steve Jobs or Warren Buffett is going to say, "Well, I made $100 million last year, but with the tax rates up 5%, I'm only going to make $95 million this year, so I'm not going to work hard?"

I find this argument grossly underestimates the industriousness and ingenuity of the American people. America is not the wealthiest country on the planet because its marginal tax take is 6.5% less than the OECD average. It became the richest country on the planet because of the characteristics of the American people.

Yes, taxes can be too high. Yes, lower taxes are better. But some of the things people say are just silly.

BTW, one of the proposals in the budget is that what is known as carried interest of private equity and hedge funds will be taxed at the normal marginal rate of income. Carried interest is the fees these funds charge as a percentage of profits. For some reason I do not understand, carried interest has been deemed "capital gains" - even though it is not the fund manager's capital that is at risk - and thus taxed at the rate of capital gains, or 15%. Since the vast majority of a fund manager's earnings comes from carried interest, that means the marginal rate of tax for the fund manager is around 15%. In other words, you are taxed at a higher rate if you made $50,000 than a private equity or hedge fund manager who made $500,000,000.

Is anyone here willing to defend this as some unjust tax on rich people?

They'll take their money and their business elsewhere which is exactly what the left has been bitching about. We have the 2nd highest corporate tax in the world, yet you all scream to tax them even more and at the same time scream about companies relocating. It's an amazing display of stupidity or lack of education and common sense.

I'll have to owe you a rep for that one.

Thanks.

It drives me crazy when people lack basic common sense.
 
They'll take their money and their business elsewhere which is exactly what the left has been bitching about. We have the 2nd highest corporate tax in the world, yet you all scream to tax them even more and at the same time scream about companies relocating. It's an amazing display of stupidity or lack of education and common sense.

We have one of the LOWEST EFFECTIVE CORPORATE TAX RATE, in the world...yes our corporate tax rates seem high on the surface,

but their effective rates, the rates that these corporations actually pay after they take all of their deductions and write offs and credits comes out to some of the lowest corporate tax rate in the westernized world.

Who's "they" on your comment above btw? The hedge fund managers? are you saying they will leave our stock market and go somewhere else?

I think not....on that!

Care

Yes, I've heard all about the 'effective' tax rates, could you give me an example of a 'big, evil corporation' whose 'effective' tax rate actually ended up being significantly lower than what the corporate tax rates are actually listed to be? And another thing that puzzles me is why liberals are not currently holding your politician's collective feet to the fire over all of these lovely tax deduction and credits that these evil corporations are getting? I mean, after all, who is in charge of the tax code right now? Why that would be the majority democratic/liberal congress. Why do they stand up and bitch about the 'rich' not paying their fair share of taxes, creating class envy by pretending to stand up to the big evil corporations, yet at the same time they do nothing about all of these deductions and credits that the lobbyists are paying them to keep in the tax code? You people that think the liberal politicians are any less in bed with the 'rich' in this country or the corporations than any conservative politican are total fools in my opinion.

a tad too politically skewed post for me to bother answering....but maybe someone else will take a stab at it....i'm sorry.

and i have never said corporation are all evil....i worked for 3 different corporations over my career, and one blood bank and one hospital.
 
Well we heard the dollar amount change as to who is considered RICH during the election. The goal post will just keep moving down until people who make 27k a year will be rich. LOL
 
We have one of the LOWEST EFFECTIVE CORPORATE TAX RATE, in the world...yes our corporate tax rates seem high on the surface,

but their effective rates, the rates that these corporations actually pay after they take all of their deductions and write offs and credits comes out to some of the lowest corporate tax rate in the westernized world.

Who's "they" on your comment above btw? The hedge fund managers? are you saying they will leave our stock market and go somewhere else?

I think not....on that!

Care


Yes, I've heard all about the 'effective' tax rates, could you give me an example of a 'big, evil corporation' whose 'effective' tax rate actually ended up being significantly lower than what the corporate tax rates are actually listed to be? And another thing that puzzles me is why liberals are not currently holding your politician's collective feet to the fire over all of these lovely tax deduction and credits that these evil corporations are getting? I mean, after all, who is in charge of the tax code right now? Why that would be the majority democratic/liberal congress. Why do they stand up and bitch about the 'rich' not paying their fair share of taxes, creating class envy by pretending to stand up to the big evil corporations, yet at the same time they do nothing about all of these deductions and credits that the lobbyists are paying them to keep in the tax code? You people that think the liberal politicians are any less in bed with the 'rich' in this country or the corporations than any conservative politican are total fools in my opinion.

a tad too politically skewed post for me to bother answering....but maybe someone else will take a stab at it....i'm sorry.

and i have never said corporation are all evil....i worked for 3 different corporations over my career, and one blood bank and one hospital.

Your party is attempting to create class envy in this country in their endeavor to socialize us and it's in play in every news broadcast you see. Just look thru these threads and it is evident by most that have a 'liberal' point of view. I often wonder why the people who are excoriating the corporations and the rich in this country never ever seem to look at what the politicians in DC are doing and question any of that? What's happening right now in DC is a complete crime to every citizen in this country. Do you really believe that they are for the 'average' guy? If so, naive doesn't even begin to describe it. When people start to realize that there is no one in DC standing up for the 'average' guy, then we might actually start to make some progress in this country. There's nothing political about my post. I believe that they (politicians) are all in the same boat, but I especially think that the liberal Democrats are the worse because they are lying to the uneducated public in their quest for more power and more reliance on the state by the average citizen by creating class envy to push a socialist agenda.
 
Yes, I've heard all about the 'effective' tax rates, could you give me an example of a 'big, evil corporation' whose 'effective' tax rate actually ended up being significantly lower than what the corporate tax rates are actually listed to be?

Virtually every single publicly listed corporation traded in the United States pays a lower effective tax rate than the stated rate. That is because virtually every single corporation uses some sort of loophole or write-off available to it, whether that is deferring offshore income or using double-declining rates of depreciation instead of using GAAP to calculate taxes.

None of this is illegal. Far from it. And for the record, I generally prefer lower corporate tax rates because corporations are the drivers of wealth creation. However, it is disingenuous to say the taxes corporations in aggregate pay are high when what they actually pay is much lower than advertised. If we are going to have a debate about how high corporate tax rates should be, we have to have an intellectually honest argument, not one that distorts facts.

And I still have no takers on why a private equity and hedge fund manager who makes $500,000,000 a year should be taxed at a lower rate than a person who makes $50,000 a year.
 
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Yes, I've heard all about the 'effective' tax rates, could you give me an example of a 'big, evil corporation' whose 'effective' tax rate actually ended up being significantly lower than what the corporate tax rates are actually listed to be?

Virtually every single publicly listed corporation traded in the United States pays a lower effective tax rate than the stated rate. That is because virtually every single corporation uses some sort of loophole or write-off available to it, whether that is deferring offshore income or using double-declining rates of depreciation instead of using GAAP to calculate taxes.

None of this is illegal. Far from it. And for the record, I generally prefer lower corporate tax rates because corporations are the drivers of wealth creation. However, it is disingenuous to say the taxes corporations in aggregate pay are high when what they actually pay is much lower than advertised. If we are going to have a debate about how high corporate tax rates should be, we have to have an intellectually honest argument, not one that distorts facts.

And I still have no takers on why a private equity and hedge fund manager who makes $500,000,000 a year should be taxed at a lower rate than a person who makes $50,000 a year.
but they arent
someone making $50k a year is not going to pay the same rate as someone making over $100k a year
if you are using "taxable income" as the basis
 
but they arent
someone making $50k a year is not going to pay the same rate as someone making over $100k a year
if you are using "taxable income" as the basis

They will if they run an investment partnership.

I'll give you a real world example. A portfolio manager runs a $2.5 billion hedge fund. He charges a management fee of 2% and what is known as "carried interest" of 20%, meaning he gets 20% of the profits.

He bets that the housing market is going to collapse and sells swaps against an index of subprime mortgages. He is right and the housing market collapses. His partnership earns 100%, or $2.5 billion. By the terms of the partnership, the hedge fund manager earns 20% of that $2.5 billion, or $500 million.

Now, most reasonable people would view that $500 million as fee income. However, the IRS does not. If you or I were lucky enough to invest with this hedge fund manager, our 100% return would be taxed at a rate of 15%. No problem. Those are capital gains and taxed at the rate of capital gains. However, the hedge fund/private equity lobby was successful at convincing legislators to view that $500 million in carried interest as capital gains like you and I would pay, even though the hedge fund manager did not risk his own capital to earn that $500 million carried interest. (If the manager had his own money in the fund, that is taxed as capital gains, but that is not the issue.) Thus, the hedge fund manager pays a rate of 15% not 35%.

The hedge fund industry is roughly $1 trillion. It was $2 trillion a few years ago. On average, hedge funds return about 10% per year. Thus, at its height, hedge funds generated $200 billion in returns. The loss differential to the Treasury was $40 billion.

I think most Americans would find this patently unfair. This is what Obama wants to change, and is included in the tax package that people are railing against as evidence of class warfare.

For the record, I know people who run these funds. These people worked 100 hours a week when they were making $2 million a year. They worked the same when they were making $20 million a year. They will work just as hard when their after-tax income falls from $20 million to $16 million.
 
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