Wednesday, September 30, 2015

Donald Trump's Hot Air About Hedge Fund Mangers Not Paying Taxes

Trump, Clinton Lines on Hedge Fund Tax Payments Puzzle Experts
By Richard Rubin

Here’s something Donald Trump and Hillary Clinton actually agree on: hedge funders pay almost nothing in taxes.

But that election-season refrain, from Republicans and Democrats alike, puzzles many tax experts.
Sure, hedge funds, like big corporations, use myriad maneuvers to legally reduce their tax bills. But the political line focuses on a single aspect of the U.S. tax code -- the treatment of carried interest -- that actually benefits financial players like private-equity investors far more.

“The hedge fund guys don’t give a fig about the carried interest legislation,” said Mark Leeds, a tax lawyer who does work for hedge funds at Mayer Brown in New York. “The public dialogue that hedge-fund managers are enjoying this benefit is so untrue that it sort of just defies the imagination.”
It’s easy to understand why politicians of all stripes keep talking about carried interest, which is the cut of client profits that managers get to keep. For many, hedge funds have come to symbolize the 1 percent era of Wall Street hyper-wealth, as well growing economic inequality.

Some hedge funds assuredly benefit from the carried interest break. The treatment gives huge advantage to investors who hold assets for at least a year by enabling them to pay the long-term capital gains rate of 23.8 percent instead of the 43.4 percent rate on short-term gains. But many hedge funds don’t fall into that category, particularly those employing hyperkinetic, computer-driven trading strategies that involve buying and selling securities thousands of times a day.

1 comment:

  1. I'm not sure if Trump does it knowingly or not, but in essence what he's doing is using demagoguery to keep himself polling well.

    It doesn't matter if building a wall would work or not, or if the tax situation for hedge funds is as he describes and his tax policy proposal addresses it or not.

    What he's appealing to is the masses "envy". It's a very powerful method by which to get people to vote for you and has worked for some time.

    People who can't get jobs or don't make what they think they should because of illegals(which is a HUGE number of people) LOVE hearing Trump say "The illegals have to go".

    This is no different than Hitler blaming the Jews for Germany's financial woes or the long history of political scapegoats over literally thousands of years that have been used to motivate the masses politically for whatever the leader doing so wants.(including war)

    Trump is speaking to a vast audience of people suffering financially & using envy to further his political goals. I have no doubt he will be successful in doing so(to the point he will be elected remains to be seen) and is better than most of the other candidates on both sides of the current paradigm in doing so.

    "Reality" or rationality doesn't matter.

    It doesn't matter that government has been impoverishing most of these people, or that some of them aren't as productive as illegal who can't read or write coming here and working their asses off to scrub toilets & mow lawns- all that matters is that Trump is levering their envy/emotions to gain votes- and THAT is a proven model of success for those seeking election(unfortunately).

    Trump still yet may be better than most of the other horrible people running for office(I have no idea, as they are all liars and unprincipled), but that doesn't change that he seems to either intuitively or purposely be the best at demagoguery among those running.