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Brain -> The Secret Billionaire Tax Break (6/9/2010 9:49:56 PM)
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Fuck them. Fuck these fucking assholes and this bullshit. They shouldn't be taxed anymore than anyone else and they shouldn't be taxed any less - pricks.
“Without the carried interest rate, lobbyists will tell you with a straight face, the engine of capitalism would break down.”
What a bunch of bullshit.
The Secret Billionaire Tax Break
The Senate yesterday teed up its next big battle: Will Wall Street titans pay half the tax rate of everyone else? Randall Lane on the $20 billion loophole not even the fat cats will defend.
Is the act of pushing money around still considered more socially valuable than actually creating things? And its corollary: Do Wall Street millionaires and billionaires, the folks responsible for a large chunk of the mess we’re in, still deserve to pay less than half the tax rate of the rest of us?
For decades, this subsidy for Wall Street tycoons, known as “carried interest,” has allowed virtually all private equity honchos (guys who carve up entire companies), venture capitalists (guys who provide seed investment in companies), and real estate partners (Donald Trump), as well as many hedge fund managers, to get their annual bounty taxed at 15 percent versus the 35 percent incurred by most readers of this article.
Yet corporate executives who create value get taxed in full on their comp packages. Engineers who create value with a patent get taxed in full on their big bonus. Innovative teachers get taxed in full on their merit raise. Compensation is compensation, but only Wall Street’s alternative asset fund managers get the tax break, expected to approach $20 billion over the next decade.
I talked to half a dozen top private equity players and other money managers, Republicans and Democrats in equal number, and not one, even with the necessary cloak of anonymity, chose to defend why they are paying less than half the tax rate you do.
“Virtually everybody in the private equity community knows that they have been receiving a gift for as long as people can remember,” says one of America’s best private equity fund managers, with billions in deals under his belt.
How indefensible? Before the House vote, the money lobby dispatched to the Capitol the walking embodiment of the tax break’s absurdity, Blackstone billionaire Steve Schwarzman, who in February 2007 defined the last decade by throwing himself a $3 million 60th birthday party, complete with serenades from Patti LaBelle and Rod Stewart, and replica paintings designed to transform the giant Park Avenue Armory into a mirror of his $37 million Manhattan apartment. That’s not really the guy who should be groveling for his personal tax break…
“They’ll say, ‘It’s my allocation. It’s the law. We’re entitled to it.’”
That’s the key word: entitlement. More than the entrepreneurs who do the hiring, the engineers and scientists who create the breakthroughs, the teachers and professors who train the entrepreneurs and scientists, the industry’s high-paid lobbyists—private equity has poured in almost $50 million over the past three years—have to argue alternative asset managers are the most important, noble people in the economy, as deemed by the U.S. tax code.
Without the carried interest rate, lobbyists will tell you with a straight face, the engine of capitalism would break down. “Now is not the time to upend more than 50 years of partnership tax law,” says Private Equity Council president Douglas Lowenstein. Companies wouldn’t be funded. Liquidity would dry up. Jobs would disappear. And their minions on Capitol Hill repeat the party line. “This is not a time to raise taxes on investments in business,” echoes Nebraska Rep. Lee Terry.
http://www.thedailybeast.com/blogs-and-stories/2010-06-09/carried-interest-secret-billionaire-tax-break-may-disappear/
[image]local://upfiles/392475/C0C7D510E04244F69C3A1F11A36522BD.jpg[/image]
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