Do you remember the attempt to negotiate Health Care Reform in the Senate Finance Committee, in which Max Baucus performed a triple reverse cave-in with two twists? I labeled want came out of that committee BARF (Baucus Against a Real Fix). I hate to say it, but Baucus just barfed again.
Executives at investment partnerships including private-equity firms and hedge funds have won a four- year battle with congressional Democrats over increasing taxes on a large portion of their pay.
U.S. Senate Finance Committee Chairman Max Baucus, a Montana Democrat, omitted a provision to boost tax rates on so- called carried interest from a bill to extend 2001 and 2003 tax cuts for middle-income Americans that is set for a Senate vote tomorrow. The bill also would renew dozens of expired business tax breaks to which the carried interest proposal had been attached as a budget-balancing measure.
The omission closes the door on efforts by Democrats to change the tax treatment of carried interest. Carried interest is the compensatory share of an investment partnership’s profits that fund managers receive as part of their pay. The pay can qualify for the 15 percent capital gains tax treatment even though it’s a return on labor rather than capital invested… [emphasis added]
Inserted from <Bloomberg>
This gives billionaire hedge find managers a tax rate the same or lower than that of the janitor that cleans their office. I can see no viable reason for this, so whatever his motivation, it must be foul.
8 Responses to “Baucus Barfs Again!”
Sorry, the comment form is closed at this time.
Hey! Damn it Tom didn’t you watch the video at the top of today’s post? There has to be some portion of the population which has to be able to afford to eat and stay off the riot ridden streets. Who better than them who know how to manipulate money and debt?
Too true
There are at least two solid reasons that “carried interest” is compensation, and NOT capital gain:
[1] While it’s true that hedge fund managers receive gains on capital – it’s someone else’s capital they managed for which they’re being compensated! Hedgers don’t invest their own money. They simply take a lion-size share of the profits from money that other people ponied up to the fund. And if the hedge fund loses money? Well, the managers simply walk away without losing a single penny.
[2] Hedge fund managers have actually admitted that, in fact, their “carried interest” is indeed compensation. When the huge hedge fund firm, Blackstone Group, filed IPO (Initial Public Offering) papers with the Securities and Exchange Commission to take its partnership public, they directly admitted that:
Source [PDF]:
http://waysandmeans.house.gov/media/pdf/111/Carried_Interest_Quotes.pdf
Since hedgers are being richly compensated for managing other peoples’ money, they should be taxed on that compensation as regular income – should like the rest of us are. Forget that 15% “capital gains rate” crap!
Exactly, Nameless. That loophole is just welfare for the rich.
Is that Frank Booth from Blue Velvet right behind Baucus?:-) No wonder he looks so nervous.
LOL!
I don’t know how they ever got that crap to pass – especially with what the banks did to us.
Those who passed it were Bankster bought.