This has something to do with how the hedge fund guys make a ton of money, that they pay no taxes on.
Politicians (in both parties) like to vilify Wall St, but never seem to go after their tax-free status, since that’s where a lot/much of their donations are coming from.
Goes back to this...
Trump is saying the same thing he’s been saying, for a long time.
NewsMax/GOPe is just trying to do the twist....throw ‘em a Twister board :)
Read post 19 and follow though the links to Laz’s thread.
Wherever do you get this “tax-free” junk?
There’s no such thing, unless you own tax-free municipal bonds, which have nothing to do with hedge funds.
Organized as a general partnership (typical hedge fund organization) the gains of the general partner have the same tax characteristics as the gains of the limited partners.
It’s called a carried interest. That is, the limited partners own XYZ (whatever group of securities or commodities or whatever that may be) and agree to pay 20% (or whatever %) of the appreciation on XYZ over the course of a year to the general partner as a performance fee.
No performance? Performance fee is zero.
Positive performance? Performance fee is 20% of the increase in value.
The taxation of the gain on the “carried interest” is subject to the same schedule of rates as the gains are taxed to the limited partners.
The manager (general partner) probably also charges 1-2% per year to run the money, regardless of any gains.
The annual charges are subject to regular earned income rates, the performance fees depend on the asset(s) involved.
Ain’t none of them “tax-free.”