Posted on 09/22/2015 6:26:26 AM PDT by SeekAndFind
Donald Trump has promised that he will ease burdens on the middle class by going after “the hedge-fund guys,” who, he believes, do not pay enough in taxes. “They’re making a tremendous amount of money — they have to pay taxes,” he says. Because the one thing in which Trump is consistent is his vagueness, it is not 100 percent clear whether what he is talking about is the so-called carried-interest loophole, which is very much on the minds of people with economic-policy views similar to Trump’s — meaning Bernie Sanders and Hillary Rodham Clinton and other cookie-cutter progressives — but in any case, it is worth having a look at the reality and the myths of how hedge funds and other financial firms are taxed, assuming that we want to start with facts and proceed to opinion rather than go like a crab backward.
The myth is this: Hedge-fund managers take home tremendous paychecks that are really plain old payments for services but which are disguised as long-term capital gains, meaning that they get taxed at 15 percent rather than the 39.6 percent I pay on my salary, which is fundamentally unfair.
The thing about myths is, they’re myths.
If you will forgive a brief little dip into finance gobbledygook, some clarification is in order here. The first thing to understand is that “hedge fund” has come to be used the way the Left (and science-fiction writers) use the word “corporation,” meaning: men and institutions with a great deal of money doing things that I do not understand, who must, therefore, be evil. Indeed, the current discussion about the taxation of financial firms is a terrific example of how the good-guys/bad-guys school of policy analysis makes people stupid.
(Excerpt) Read more at nationalreview.com ...
The issue here is how the hedge fund managers are compensated for managing the hedge fund.
A group of investors invest funds into a hedge fund which makes investment in underlying securities. The investors treat the transaction as investment and are taxed on investment income (interest, dividends, capital gains, etc.) as if they made the investment themselves. No one is suggesting that be changed.
The hedge fund manager receives a “carried interest” in the fund as compensation for their services in raising money for investors and managing the investments. This carried interest is an allocation of the interest, dividends, and capital gains earned by the fund. What Trump is suggesting is that the compensation be taxed as ordinary income just like any other form of compensation for services rendered.
Trump is only suggesting removing this special break for the managers of the fund. The taxation of the investors would not change.
And managers sometimes get paid partially in stock options. It’s not a special break for hedge fund managers, it just sounds good for the low info populist voters.
His plan calls for removing ALL ‘tax incentives’, not just one.
Too bad Trump’s tax plan is totally over your head.
Yeah, I think people underestimate how much of the hedge fund industry is populated by big time Wall Street democrats.
In the end, a giant monopolistic crony capitalist financial industry is not in our best interests.
Trump has always been a guy who made his money building things not shuffling money. There is always a tension between the financial guys and the guys who make/produce things.
Since this appeared in the crony capitalist rag online (known as (NRO), I tend to have the visceral reaction that says....hah folks gaming the system who brought about the 2008 financial melt down trying to defend their sleasiness.
Other than that it is fine
AMEN, preach it bros....puts you (and I) in a teeny tiny minority, sadly. Used to be on a conservative site, that's not the case.
agree with every word......in your post.
Too bad so few get it.
>> Read the article <<
We don’t believe in doing that. Your comment is totally out of line.
>> I am pretty sure the content of this article was way above the heads of most <<
A little projection there, eh?
That is, your comment is probably a bit above the heads of most on this thread.
(Or am I being too sarcastic?)
“The issue is about TAXATION.”
Maybe so, but the issue I addressed was the credibility of Williamson. He has lost his with me, since I have read his previous writings, before and after Trump. Same goes with National Review.
“The democrats do propose it and I still think it’s a bad idea.”
Exactly why do you think it’s a bad idea?
Used to be on a conservative site, that’s not the case.
Your petty insults are getting tiring. Why don’t you move on if you don’t like it here? Deal?
Hedge-fund managers take home tremendous paychecks that are really plain old payments for services but which are disguised as long-term capital gains, meaning that they get taxed at 15 percent rather than the 39.6 percent I pay on my salary, which is fundamentally unfair.That's it in a nutshell. If that is a myth then no problem.
But if it's not a myth, why are the earnings of a hedge-fund manager treated different from the earnings of any other self-employed or service business?
RE: Maybe so, but the issue I addressed was the credibility of Williamson
OK, let’s address THIS specific issue. Where is he wrong, inaccurate or not credible?
RE: We don’t believe in doing that.
So what do you believe in doing instead?
RE: Your comment is totally out of line.
Really? Based on what FR rule?
“Where is he wrong, inaccurate or not credible?”
Go check out his first Trump hit-piece. It barely rose above the level of name calling.
It seems that every writer at National Review has been assigned to write at least three of these types.
First, it is a glorification of conservatism, then it points out how far Trump has strayed off course, while completely ignoring the straying of ALL the other elected officials.
If Trump is a liberal, and assiduously enforces his published stances, then I don’t care. That would be oceans more conservatism than the conservative elected officials have accomplished.
When you can’t argue the issue, just hurl insults, right?
If you read the article it explains it in pretty simple terms that most people can understand.
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