Trump says tax code is letting hedge funds 'get away with murder'

[Formerly Once-Ler]

I never met higher taxes that I liked, and I never met lower taxes that i didn't like.  If it was up to me, rather than increasing the capital gains tax, why not reduce spending, reform the tax code, and lower the income tax to 20 percent so that it is in parity with the capital gains tax? 

Why are Republicans suddenly in the business of class envy and creating straw men out of people who are successful?  When did successful people become evil?  And isn't Donald Trump himself the beneficiary of rules he had nothing to do with creating, but took full advantage of?

I am so tired of the politics of pitting group against group in order to win votes.  How about we take the higher ground and talk about the things that unite us: the desire to be free, to be upwardly mobile, to take pride in one's achievements, to be proud of the country. 

Trump's populist pandering does not impress me.

Great post.

[EdinVA]

Oh, Ed, you have it exactly backwards.  We have NOT been on a free market capitalist path for the last 20 years.  We have been on the path toward socialism.  Our failure to keep up with the rest of the world is directly correlated to our increasing regulation, monetary manipulation, taxation, government bite of the total economy.  Our hands are being tied by government.  And you propose what?  MORE government to fix the problem?  Your solution is coming from desperation.

Please name me a single country -- one -- that benefited over the long term from protectionism and restricting free trade.

I am positively flummoxed that so many decent, hard working conservatives are ready to give up on capitalism because of a charlatan populist with a very bad haircut.

Who do you think bought and paid for the politicians to vote for all that regulation?  Wasn't me, how about you?
The big business guns are behind most of the regulations trying to get rid of their competition.  Newt Gingrich talks about this in his books.

Who pays for the oil spill clean up?  The oil companies? The taxpayer
Who pays for contaminated water from mining?  The mining companies?  The taxpayer
Toy companies are still importing products with lead based paint, do you do that?  Not me....
Each and every day there is a class action lawsuit about one drug or another that they have discovered kills the people it is supposed to help.
Who are the ones paying politicians for more H1B visas and open borders?  You?  It certainly is not me.

If you think it is bad now, what makes you think it will get better if we just abolish all the regulation and eliminate the watch dogs?
True, stuff will be cheaper but at what cost.
The big businesses are no better now a days than the federal bungle and I trust them both about as far as I can spit.

[GourmetDan]

I never met higher taxes that I liked, and I never met lower taxes that i didn't like.  If it was up to me, rather than increasing the capital gains tax, why not reduce spending, reform the tax code, and lower the income tax to 20 percent so that it is in parity with the capital gains tax?

Yeah but it's not up to you... hedge fund managers with a lot more reasons to benefit got that break... you didn't...

Who do you think bought and paid for the politicians to vote for all that regulation?  Wasn't me, how about you?

Exactly... would be nice to know who paid and who got paid for the 20% tax rate for hedge fund managers...

[EdinVA]

What Trump is talking about is the 'carried interest loophole' that lets hedge fund managers with incomes in the top income-tax bracket (39.6%) pay taxes on that income at the capital-gains rate of 20%.

If you like that... fine...

I think the issue is bigger than that.

While speed and bargain prices are big attractions, the real draw, say analysts and Congressional investigators, are perfectly legal Caymans-based corporations and partnerships that allow major investors to avoid taxes of up to 35 percent that the Internal Revenue Service levies on unearned business income. Cayman tax laws also help American fund managers legally defer domestic taxes on their personal profits by channeling them offshore through their funds.

http://www.nytimes.com/2007/07/01/business/yourmoney/01cay.html?pagewanted=all&_r=0

[GourmetDan]

I think the issue is bigger than that.

Might be... that article is 8 years old...

[EdinVA]

Might be... that article is 8 years old...

At the time of the big bailouts there was discussion of fund managers getting billion dollar commissions tax free.
Did not remember the details but it is evidently true and nothing I could find leads me to believe anything has changed since.

[GourmetDan]

At the time of the big bailouts there was discussion of fund managers getting billion dollar commissions tax free.
Did not remember the details but it is evidently true and nothing I could find leads me to believe anything has changed since.

Maybe true... maybe not... but according to Fortune, Trump was referring to the 'carried interest loophole' in his comments...

Here’s what Donald Trump had to say about hedge fund managers

"Trump specifically addressed a tax code loophole known as the “carried interest loophole,” a provision in the tax code that lets private equity and hedge fund managers pay taxes at the capital gains rate instead of the ordinary income rate. As detailed by Reuters, the capital gains tax bracket is only at 20%, significantly lower than the top income bracket that many fund managers would occupy, which is around 39.6%."

[EdinVA]

Maybe true... maybe not... but according to Fortune, Trump was referring to the 'carried interest loophole' in his comments...

Here’s what Donald Trump had to say about hedge fund managers

"Trump specifically addressed a tax code loophole known as the “carried interest loophole,” a provision in the tax code that lets private equity and hedge fund managers pay taxes at the capital gains rate instead of the ordinary income rate. As detailed by Reuters, the capital gains tax bracket is only at 20%, significantly lower than the top income bracket that many fund managers would occupy, which is around 39.6%."

ahhhh, missed that, thanks for posting.
I am convinced however, that even paying 1% would be to much for these offshore types....

[Fishrrman]

mass asks above:
[[ Frankly, I am beginning not to recognize the Republican Party.  When did we embrace protectionism, regulation, taxation, manipulation of the currency?  I remember when we favored free markets and property rights. ]]

That's because since the 1960's, the "center mass" in this country has been shifting slowly -- but relentlessly -- to the left.

What was "left" back then is now "far left" and moving ever-further leftward.
What was "center" is "the new left".
The "moderate Republican" position continues to slip leftward, as well.
It's a downward slope, and everyone who isn't nailed to the floor is slidin' down.

Those who continue to hold out as "old-line conservatives" are now denigrated as "racists, xenophobes, and next-to-Nazis".

You come from the field of education.
I'm sure you know who Antonio Gramsci was, and what the Frankfurt School was.
They laid out the long-term strategy for victory.
That strategy has very nearly won.

[Formerly Once-Ler]

That's because since the 1960's, the "center mass" in this country has been shifting slowly -- but relentlessly -- to the left.

What was "left" back then is now "far left" and moving ever-further leftward.
What was "center" is "the new left".
The "moderate Republican" position continues to slip leftward, as well.
It's a downward slope, and everyone who isn't nailed to the floor is slidin' down.

I agree with much of what you say.  The center has been pulled left, although I think it is ready to climb up that see-saw and shift to the center right.  When that center of gravity slides the center to the right the change could be dramatic.

Those who continue to hold out as "old-line conservatives" are now denigrated as "racists, xenophobes, and next-to-Nazis".

Old-line conservatives who protest trade agreements and legal or illegal immigration will often be associated with white seperatists, because they share similar goals.  You lay with dogs you get fleas.  I sometimes think people who disagree with me are wrong because they are stupid or racist.  I do not think you are either Fishrrman, but the name calling comes with the position.  I don't like Trump, so I must be selling my country, and my children's future away for the filthy lucre of my Establishment Over Lord's favor.

You come from the field of education.
I'm sure you know who Antonio Gramsci was, and what the Frankfurt School was.
They laid out the long-term strategy for victory.
That strategy has very nearly won.

I think if you really believed that, you wouldn't still be playing the game, but I do agree we got where we are through long term incremental change...so I suggest incremental change to get us to where we should be going.




 

[Scottftlc]

So, Trump is wrong?

No, actually he's not wrong. Venture Capital and Hedge Fund managers spend unbelievable amounts of money getting the tax rules to be very friendly toward their particular forms of private equity, on a national and state level.  It dramatically increases their ROI.  It is an unlevel playing field with other less esoteric investment vehicles.  They made it that way using tremendous amounts of cash put in politicians pockets. I happen to have been sitting in one Democrat Governor's office in Washington state about 20 years ago when a Hedge Fund firm plopped a $25k check on Gov's desk then headed across town where the Governor appointed investment board was voting to invest $200M with their fund. It was $25K well-given.

[Bigun]

No, actually he's not wrong. Venture Capital and Hedge Fund managers spend unbelievable amounts of money getting the tax rules to be very friendly toward their particular forms of private equity, on a national and state level.  It dramatically increases their ROI.  It is an unlevel playing field with other less esoteric investment vehicles.  They made it that way using tremendous amounts of cash put in politicians pockets. I happen to have been sitting in one Democrat Governor's office in Washington state about 20 years ago when a Hedge Fund firm plopped a $25k check on Gov's desk then headed across town where the Governor appointed investment board was voting to invest $200M with their fund. It was $25K well-given.

And that is just ONE of many such bought and paid for items in the rotten to the core Income Tax code!  We deserve MUCH better!


http://www.youtube.com/watch?v=QRpWir4eDrs

[rb224315]

This is an interesting conversation and I know it's in response to something Trump said, but he misses the more important point:  why the he11 does the federal government take so much money from taxpayers in the first place?  The tax collection discussion is about the structure of the system used to extract dollars from private citizens.  No matter how it's collected--income taxes, consumption taxes, whatever--the fact is that too much money is being taken out of the economy to fulfill political promises which are impossible to keep.  We can try to optimize the size and shape of the bucket used to bail water from the Titanic but until the giant gash in the hull is addressed, we're screwed.