The hedge manager’s interest issue is about something called “carried interest.” I have mixed feelings here, because I am for low capital gains.
If you don’t know, carried interest refers to the contractual incentives for hedge funds. They get a fixed fee, and an incentive fee—for a long time it was 2% fixed, plus 20% of gains. These gains are on the whole fund’s assets, that is, on the customers’ (or limited partners’) accounts. That money isn’t owned by the managers. The question is, should the taxes for the managers be at capital gains or at ordinary income levels, or somewhere in between
On the one hand, the assets appreciated, so shouldn’t the capital gains be passed through? On the other hand, it’s of the nature of a management fee, although it is variable based on performance. I can see arguments both ways.
Personally, at the moment, I wouldn’t touch it, because I view any change upwards in capital gains taxation as the “camel’s nose under the tent,” preparatory to more general raises, and capital gains should NOT be taxed as ordinary income because of the risks involved in investment, and also because of the disincentives to capital formation.
Yes of course.
The higher you tax something (including capital and investment) the less you get from it.
My biggest issue with DT, I perceive him as more of a populist and not so much of a real conservative.
His delightful lack of political correctness is a breath of fresh air, but his populism on such issues should be concerning. I believe in the not too distant past, DT favored single payer health system like they have in Canada, a wealth tax to be charged on privately held assets. He also lavishly contributed to Democrat campaign committees in 2006 which brought in in House Speaker Nancy Pelousy and Sen. Majority Leader Harry Reid.