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. Theyre 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 Trumps 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, theyre 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 ...
Non-qualified stock options are taxed as ordinary income when exercised. They are taxed in the same manner as compensation.
The “carried interest” income that the hedge fund manager received effectively allows their compensation for managing the fund to taxed as a capital gain not as compensation for services.
Why should the hedge fund manager providing management services be taxed in the same manner as an attorney providing legal services to the fund?
“national Review has become a GOPe hack outfit and I refuse to read anything from them. “
A bit basic, but DEAD on the money. I started reading NR in 1968 when I was 14. Great literary mag at that time. A POS rag today. I quit it years ago.
“Rich Lowry began his career as a research assistant for Charles Krauthammer.”
LOL what a surprise this is!
Incentive stock options are taxed at the long term capital gains rate if the options are sold after a year or more. Private equity firms benefit from the carried interest rules, so why should hedge fund managers be taxed differently?
if it were really just petty - then you'd be able to refute it on substance instead of actually being petty yourself. I don't shy away from the truth, or a battle. Come at me with substance, or steer clear.
yeah, I think you jumped the “sarcasm shark” on that one....but I get your point.
:)
“National Review has become a GOPe hack outfit and I refuse to read anything from them. They have been outed...but to each his own
*******
The article may be spot on but NR is so pro-Jeb and anti-Trump that I also no longer trust their views. There was proof enough of that when Rich Lowry lambasted Trump on Megyn Kellys show last night. Watch out for this guy.”
What the faux intellectuals on this thread fail to understand is we don’t give a rat’s arse if this political hack is correct in this instance. There are plenty of credible writers to make this case and this RINO whore is not needed to make this case, or any other case. NR has lost all credibility as a conservative magazine.
Good post, Jane.
” income that the hedge fund manager received effectively allows their compensation for managing the fund to taxed as a capital gain not as compensation for services.”
Not exactly.....If I were you I would try not to associate “carried interest” with Hedge funds...
It’s generally found in Private Equity management, where the manager essentially receives interest on his invested Capital as a performance reward of sorts...
I think that if you added up the entire universe of carried interest tax filings and taxed it a 39% as opposed to 20%, you would not generate enough money to make a decent spitwad in real terms.
The carried interest complaint came about when Romney, a person who deals in private equity, was running for president and it’s a bogus argument for the most part. Very small potatoes but the Dummycrats, will use anything they can.
No, the real issue, is the short term vs long term capital gains tax. The left says it’s unfair...Even Warren Buffet said that.
But there is a legitimate reason for it. it helps provide market stability and liquidity because it balances the market effects of long and short time securities traders..
Without it, there would be no real incentives to holding a security any longer than it takes to make a profit and that can be minutes or hours...depending..
Without it, everyone would be a day trader.
“And we dont need to tax certain groups of people differently for long term investments just because they make more money doing it.”
Hedge fund managers do not deserve tax breaks others don’t get. Why do you defend them so. Are you a Democrat like the majority of them are, also?
Fun watching the Trump drones shoot the messenger.
Again.
Ever notice how many hedge fund managers play high stakes poker, you know $100,000 and up to $1,000,000 buy in?
Hedge funds are the GOP version of carbon credits.
They don’t get tax breaks others don’t get. That is just populist rhetoric. Just like they tell people those evil rich oil companies are subsidized. They are not subsidized. If you think calling me a democrat proves your point that is laughable, and quite frankly I don’t understand your contempt for just hedge fund managers.
He laid one on me a few days back, this election cycle has made him manic.
RE: Ever notice how many hedge fund managers play high stakes poker, you know $100,000 and up to $1,000,000 buy in?
So, is it the government’s job to put a stop to it via the tax code?
Should tax code to be used to punish certain behavior and reward certain others?
If so, when does it end and who’s to say what one’s favorite behavior should be rewarded and what one’s hated behavior should be punished?
They always are and the usually involve corrupt congress critters.
It’s not hurling insults. More like hurling facts. You haven’t educated yourself on Trump’s plan by reading his book, therefore, you are making assumptions and there isn’t any real issue to argue with you. Therefore, pointing out your ignorance is just stating a fact.
Soon enough, his tax plan will be officially unveiled and you will probably find it harder to go around half cocked getting all worked up over something you don’t understand. I wonder if you’ll still try anyway...
Which, when done by someone who has nary a clue what Trump's tax policy would be, is absolutely worthless. And when Trump's ideas on such policies are clearly written down in Time To Get Tough, it's really irresponsible of Mr. Williamson to remain so ignorant.
It seems to me that THEY are the ones hurling insults because they are unable to make a cogent argument. Particularly Sir Edmund.
Don’t like them much as a breed of gamblers. Are you a hedge fund manager; is that why you defend them so?
Any party to an argument who relies on ad hominem insults, as opposed to facts and logic, is giving you proof upfront that he has lost the argument.
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