Democrats & Liberals Archives

Super-Wealthy Get the Tax Breaks

With Cracker Jacks the more you have the more you want. With money, the more you have the more you get - and the less you pay in taxes. If you are super-wealthy, you get the tax breaks without even trying.

The New York Times reports about the outrageously corrupt deal for the outrageously wealthy:

The New York Times reports that leaders of the tax-writing committees in Congress are considering a new proposal to end a tax break that has allowed wealthy financiers who run private equity firms and hedge funds to cut their total income tax bills by billions of dollars ... At the heart of the newest proposal is an attempt to bar private equity and hedge fund operators from a longstanding, but little understood, practice that has allowed them to pay a lower capital gains rate of 15 percent instead of the ordinary top income tax rate of 35 percent on their performance fees, which typically represent most of their annual income.

I can't understand why money you do not work for should be taxed at a lower rate than money you earn with the sweat of your brow. Even if you do tax capital gains at a lower rate, the managers of these equity funds do not invest their own money; they manage other people's investments. However, they are politically astute.

So an equity fund manager making $1 billion a year is taxed at a lower rate than a middle class guy making $100,000. Some equity!

These billionaires are powerful. As the article states:

This tax break has helped add to the record level of wealth among hedge fund managers, who invest pools of money from wealthy individuals and individuals in a variety of activities, and private equity executives, who use their investments to acquire control of publicly traded companies.

They are ruining our system of capitalism, as well.

Let's make the super-wealthy pay taxes. Eventually, whatever they do not pay is paid by the rest of us. Why should the not-wealthy pay the taxes owed by the super-wealthy?

Posted by Paul Siegel at June 22, 2007 11:00 PM
Comments
Comment #223926

Paul,

As a Clinton staffer recently said:

“can you quote me yawning?”

Posted by: wolf at June 23, 2007 9:11 PM
Comment #223934

Paul, terrific article. I agree 100%.

Posted by: Adrienne at June 23, 2007 10:23 PM
Comment #223937

They aren’t yawning on Wall Street or on the Business channels of cable and satellite TV. This is a very hotly debated issue, with conservatives like Kudlow arguing a move for tax parity would dry up capital and hurt the economy, and his counterparts arguing that increased taxes on the very wealthy NEVER bankrupted the very wealthy OR the economy.

I would side with the counterparts. What is the difference between a billionaire and a $900 millionaire? Nothing more than 100 million in taxes. They are still obscenely wealthy, and the deficits drop slightly with increased revenues. The person can struggle and tighten their belt to live on 100 million per year, and still have $800 million to invest in capital markets.

I frankly see this as a no brainer. I have always subscribed to the concept that those with the MOST to lose in our society, have the largest obligation to underwrite the government and society that protects the rights and freedoms to enjoy their wealth in a stable and predictable society such as ours.

Republicans seem to have an opposite view. Those with the most to lose, have the greatest vested interest in controlling government to maximize their vested interests, regardless of harm that may befall the nation and society upon which such wealth is garnered. The 1928-29 investor psychology redux.

Posted by: David R. Remer at June 23, 2007 10:38 PM
Comment #223953

Paul Siegel- I would not mind giving back a little, if
all the parties involved would stop wasting
an handing out our tax money for all the useless
purposes they can find. Other wise, I might as
well keep as much as I can..?

Posted by: -DAVID- at June 24, 2007 12:24 AM
Comment #223954

David, why are you attempting to tie this exclusively to Republicans? Not even Paul, as partisan a Democrat as they come, did that.

The NYT says that this is a long-standing tax policy. Also:

That bill only covered a handful of firms, including Blackstone Group, the private equity firm that is planning to sell shares to investors tomorrow.

Now consider this indvidual who just happens to have been not only Clinton’s undersecretary of Commerce but a former managing director of the Blackstone Group.

Line up the dots.

Posted by: Loyal Opposition at June 24, 2007 12:35 AM
Comment #223973

Paul, the reasoning for the lower taxes is that investment is worth more than labor. Debatable perhaps but there you are.

Now, normally I would not be siding with you here, but I have a real problem with hedge funds, particularly when it comes to their ability to leverage at astronomical multiples. I certainly think that putting the brakes on this group of “investors” would not harm the economy in the least, and would probably save us from considerable harm down the road.

Posted by: Zeek at June 24, 2007 1:03 PM
Comment #224020

And this government-for-hire surprises us…..how? Between the fact that campaign contributions make officials beholden to the gift-givers and the sad fact that you practically need to be a millionaire to run for office in the first place, it’s very hard to keep let’s-help-the-rich-get-richer laws off the books.

L

Posted by: leatherankh at June 25, 2007 12:48 AM
Comment #224043

I have worked for large and small USA companies for 35 years. The lust for greed I see now sickens me. These top people in most USA corporations are so busy padding their Golden Parachutes, backdating their stock options, screwing their employees and customers and cooking the books they don’t have time for real commonsense business management decisions. Look at Ford, GM and Chrysler. How out of touch can you be and still manage a business? Look at the money these people make as managers!!! The money they make does not benefit the US economy in an off shore bank account where it is used to get out of paying taxes. Look at Halliburton they made millions and they left the country. This trickle down crap does not work, with the amount of money pouring in at the top we should have a flood down here, and I have not seen a drop down here in my department. I remember when company’s where a very important, proud part of the community, now they are a burden on there community. Now they create working class slums not the middle class dreams we once had. If you take care of your employees and customers they take care of you mister big shot. Most of the time your employees are your customers they drive the economy. Your employees don’t horde money if off shore bank accounts, they pay their taxes, and purchase the goods the need for every day life. Wake up before the only thing left will be corporate greed.

Posted by: Outraged at June 25, 2007 12:34 PM
Comment #224049

Out,

Sounds like you should find another job working for someone else. Nobody is telling you to stay where you are…Leave…

Better yet…start your own company and show everyone how it’s done…that’s what I did…

Posted by: cliff at June 25, 2007 2:04 PM
Comment #224052

Out,

Sounds like you should find another job working for someone else. Nobody is telling you to stay where you are…Leave…

Better yet…start your own company and show everyone how it’s done…that’s what I did…

Posted by: cliff at June 25, 2007 02:04 PM

Thanks for the personal advice I know starting my own business would be great for me.
The post is not about me it is about corporate greed, not my personal life. My 35 years of experience with manufacturing companies has given me a chance to see the evolution of corporate greed. Some how you go things turned around.

Posted by: Outraged at June 25, 2007 2:19 PM
Comment #224057

Your “personal life” is not the same as a rich CEO’s “personal life,” and you label this difference by calling it “corporate greed.”

No matter how you slice it, worrying about anothers wealth is a personal decision based on envy.

Posted by: kctim at June 25, 2007 3:11 PM
Comment #224064

Your “personal life” is not the same as a rich CEO’s “personal life,” and you label this difference by calling it “corporate greed.”
No matter how you slice it, worrying about anothers wealth is a personal decision based on envy.
Posted by: kctim at June 25, 2007 03:11 PM

Yes I am very happy I am not blinded by dollar sings. You need to get of the envy kick kctim. Its not about envy its about excess greed. Don’t worry about others wealth worry about being unfair and dishonest and not wanting to be a positive entity in your community. Don’t just be a predator looking for someone to victimize. Pay a fair wage that is what drives the economy all people with money in their pocket. Not just a few people with all the money in the world lock up in an off shore bank account. Step up and support your country, be a real patriot do the right thing be honest and pay your fair share. Don’t just count on the little guy to do your work and pay your taxes too, just because you don’t want to. Be proud of your country and all of your fellow Americans. This country could be a great place to live with a little fairness and honesty.

Posted by: Outraged at June 25, 2007 3:36 PM
Comment #224066

Out,

I’ve worked in the manufacturing sector for 30 years and have seen it all as well…The greedy ones have always been there and so will the giving ones.

The only way a government can decide what “greed” is, is to equate it with capitalism. The day that happens is the day we lose it all.

The answer is to uphold the laws we have and to quit thinking that everything has to be “fair” and that everyone owes you something.

Life’s not fair…never has been….never will be…

Posted by: cliff at June 25, 2007 3:55 PM
Comment #224071

Out,
I’ve worked in the manufacturing sector for 30 years and have seen it all as well…The greedy ones have always been there and so will the giving ones.
The only way a government can decide what “greed” is, is to equate it with capitalism. The day that happens is the day we lose it all.
The answer is to uphold the laws we have and to quit thinking that everything has to be “fair” and that everyone owes you something.
Life’s not fair…never has been….never will be…
Posted by: cliff at June 25, 2007 03:55 PM

Thanks for the input cliff. The thing is when I work for some one they do owe me something. If they don’t want to pay me what they owe me I don’t stay very long. I will not just be submissive if that is what you want fine, I will try and make things better where ever I go. If we all turn into sheep nothing good will come from it. We must move forward this is the modern civilized world. Get on board and make a difference.

Posted by: Outraged at June 25, 2007 4:22 PM
Comment #224073

Never been a sheep…it’s baaaad…
If i’m not paid what I think I’m worth, I leave.
I’ve always been on board, and always tried to make a difference.

BTW -

Trying to outlaw greed is ridiculous…

A Federal Sales Tax is the only way to make the system fair…(eliminate the Income tax model)

Posted by: cliff at June 25, 2007 4:45 PM
Comment #224090

Paul - the obscenity of this kind of wealth is something that I have espoused upon in the past. I felt compelled to do so on the day after Larry Ellison, CEO of Oracle, conspired to lose $4 BILLION of his fortune in one day.

Ok, so what?

Well, this was just a few weeks after Hurricane Katrina wiped out New Orleans, and, with it, 50,000 jobs or so.

So the interesting thing is this: if Mr. Ellison had simply taken that $4 billion and put it to good use…

He could have replaced every single job in New Orleans for a year, at a $40,000 salary per person.

In other words, the most catastrophic disaster of our young century could have been paid for by one man, had he felt the compulsion to do so.

But he didn’t. After all, when you lose $4 billion in one day, your hands probably tighten even further around that last $8 billion or so.

Off topic. I’ll shut up now.

Posted by: Jon RIce at June 25, 2007 10:00 PM
Comment #224124

Out
“Its not about envy its about excess greed.”

How do you determine who is greedy and why should govt punish such a personal trait?
How do you distinguish between the rich CEO who wants to earn every dollar he can and the poor unemployed guy who thinks govt doesn’t give him enough for nothing and owes him more and more in benefits?

“Don’t worry about others wealth worry about being unfair and dishonest and not wanting to be a positive entity in your community”

Thats just it, I don’t.
I don’t worry about being unfair and dishonest because I am not a hypocrite. I believe all of us are equal and should be treated as such by govt.
And as far as being a “positive entity” in my community, I already am.
I take care of myself and my family so that I am not a burden on my neighbors and govt. And I don’t do that by worrying about how much the CEO up on the hill makes or the new car my neighbor just got.

“Step up and support your country, be a real patriot do the right thing be honest and pay your fair share.”

Therein lies the problem my friend. To me, my fair share is outlined in the Constitution. To you, my fair share is what you think is the right thing.

“Don’t just count on the little guy to do your work and pay your taxes too, just because you don’t want to.”

Um, I’m one of the little guys. I work for a small business and make ends meet.

“Be proud of your country and all of your fellow Americans. This country could be a great place to live with a little fairness and honesty”

I am and I served it for 10 years.
Fairness and honesty? Like forcibly taking from one and giving to another? Like forcing others to believe as you? Like taking a persons assets because they cared more about feeding and sheltering their family than paying ridiculous taxes?
Yeah, real fair and honest.

Posted by: kctim at June 26, 2007 12:02 PM
Comment #224129

kctim,

Yes kctim now you have gotten my point, fairness and honesty. With out it life will be hard for you and your family to survive. Yes we do need accountability in government now more than ever. We should not have to pay more taxes than necessary. I think the people who benefit from it the most should not have tax loopholes and offshore bank accounts to get out of paying their share. If you are just a little guy why defend the dishonesty and unfairness of the super greedy? I don’t have a problem with it. If you don’t like some of the government programs that your taxes go to keep on voicing your opinion about it. I feel the same as you they take my hard earned tax money and give it to some slime ball fat cat that does not need it at all!!!! Like Halliburton. Kctim how many times have you written a blank check to a contractor to work on your home, or a blank check to the guy that works on your car? A no bid contract is stealing from me and you and giving it to an over paid scumbag that does not need it. So I agree with you 100%!!!!! Don’t steal from me and write a blank check to Halliburton, KBR, Titan or Black Water.

Posted by: Outraged at June 26, 2007 12:57 PM
Comment #224145


What happens when no one watches Corporate greed

{{Enron))
_

Posted by: -DAVID- at June 26, 2007 4:06 PM
Comment #224147

I also believe we should consider Corporate

greed, with the largest villainy of all the

{ U S Government } with all their Bridges to nowhere an all the rest of their perks to their
favorite contributers!

Posted by: -DAVID- at June 26, 2007 4:21 PM
Comment #224148

L O

Does the term Robber Barron’s (Republican) mean

any thing from the past to you? Looks a lot as if

History has begun to repeat it self.

Posted by: -DAVID- at June 26, 2007 4:34 PM
Comment #224152


-Finally, Since they have the Supreme Court

stacked right(excuse the pun) an all the Federal
Court Judges seated with most Federal Prosecutors
in place seems to set them up for a grand slam.

Posted by: -DAVID- at June 26, 2007 4:49 PM
Comment #224851

Lets see if I have some understanding of what
the hell is being proposed here.
All the greedy corporations should pay their fair share to whom??? (government). LOL
The political bastards that can’t even run the schools correctly.
The same elite highly educated S.O.B’s that don’t
produce a F***ing thing!!!!
Then they are going to distribute all that cash
to us lower class peon grunts out of the kindness
of their hearts.
Looks like the fools are leading the foolish!!
I keep checking my mailbox, and answering the
phone, HHHMMMMMM no checks. (BIG LOL’s)

The two most common things in the universe are
hydrogen and stupidity.

Posted by: Perry at July 5, 2007 6:58 AM
Comment #239378

“I can’t understand why money you do not work for should be taxed at a lower rate than money you earn with the sweat of your brow.”

You mean like when the welfare recipients collect monthly checks thanks to the working class?

Posted by: SFC MAC at November 27, 2007 1:47 PM
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