PDA

View Full Version : I'm in the wrong business



Norman Bernstein
05-12-2016, 10:05 AM
You Republicans might want to ask your congressmen and senators why they are defending the carried interest loophole:


NEW YORK — Wall Street’s elite club of hedge fund managers got a bit richer last year, according to an annual ranking published t (http://www.institutionalinvestorsalpha.com/Article/3552805/The-2016-Rich-List-of-the-Worlds-Top-Earning-Hedge-Fund-Managers.html)his week. The top two hedge fund managers made $1.7 billion each in 2015, and the top 25 averaged 10 percent more than the previous year.

The rankings, issued by Institutional Investor’s Alpha magazine (http://www.institutionalinvestorsalpha.com/Article/3552805/The-2016-Rich-List-of-the-Worlds-Top-Earning-Hedge-Fund-Managers.html), offers a rare peek inside the world of hedge fund managers, who can make massive bets on stocks or bonds and walk away with billions in profits. The top five hedge fund managers made more than $1 billion each last year. The top 25 hedge fund managers made a combined $12.94 billion, according to Alpha. Among the top 25 hedge fund managers, the average pay was $517.6 million. Only one woman ranked among the 50 highest-paid executives.

That puts the leaders of the hedge fund industry, a secretive and lightly regulated group, well ahead of banking executives, who have been put under greater scrutiny since the 2008 financial crisis. Jamie Dimon, chief executive of the largest bank in the country, JPMorgan Chase, made a relatively measly $25 million last year by comparison. Another frequent target of Wall Street critics, Lloyd Blankfein, the chief executive of Goldman Sachs, made $23 million in 2015.

Meanwhile, the hedge fund industry has doubled in size over the past decade, and executives are bringing in high pay despite weathering a tough year in the financial markets. Dan Loeb, the head of Third Point, a large and well-known hedge fund, said in a letter to investors last month that the industry is in the “first innings of a washout (http://www.businessinsider.sg/dan-loeb-first-quarter-investor-letter-april-26-2016-4/#.VzIt8YQrJQI).” Five hedge fund managers made enough to rank among the industry’s highest paid despite losing money in at least one of their funds in 2015, according to Alpha.

The industry is a frequent target of critics who say the world’s wealthiest financiers are benefiting from a broken U.S. tax code. Hedge fund managers’ profits are treated as long-term capital gains, which means they’re taxed at no more than 15 percent. Critics say those earnings should be taxed as ordinary income, or as much as 39.6 percent. Even Republican presidential candidate Donald Trump has called for an end to the discrepancy, saying “hedge fund guys are getting away with murder (http://finance.yahoo.com/news/trumps-tough-talk-hedge-fund-090000821.html).”

Gerarddm
05-12-2016, 10:06 AM
Bring out the tumbrils.

BrianW
05-12-2016, 01:14 PM
Not a topic brought up by Hillary, at her recent Wall Street speeches?

Wait... no, I remember now. She talked about the glass ceiling for women. We had a thread on the topic.

Guess she has priorities like any one else.

Norman Bernstein
05-12-2016, 01:28 PM
Not a topic brought up by Hillary, at her recent Wall Street speeches?

Wait... no, I remember now. She talked about the glass ceiling for women. We had a thread on the topic.

Guess she has priorities like any one else.

Interesting conundrum: Hillary gets pilloried for speaking to Wall Street.... but her money is barely a fraction of what Trump claims.

Before you applaud Trump for advocating closing the carried interest loophole, consider this: the carried interest loophole costs the taxpayers around $44 BILLION over the next ten years.....

....but Trump is advocating ending the estate tax... which will cost the taxpayers $1 TRILLION over the next ten years (and will insure that his kids, who didn't do a damn thing to earn the money, pay NOTHING in taxes on it).

At least, he's acting like a Republican.... since much of the national debt is Republican debt.

delecta
05-12-2016, 01:38 PM
The major part of BO's rebuilding was to get wall street where he and they believe they should be and now you whine. Pretty much sums up how trickle down economics don't work, guess you forgot to tell the current administration.

Oh and one more thing, there is no such thing as a "loophole". I would say better terms would be poorly written laws and tax codes but you keep calling it a loophole if it some how makes you feel better, seems like it puts the blame on the smart people and not the dumb ones where it belong. Don't you just hate when our elected officials don't cover all basis and to think they actually had the chance and wasted it on the ACA which in it's current form will be gone before BO gets his library built.

BrianW
05-12-2016, 01:43 PM
It's a 'loophole' if you don't like something.

Now if it's say… Trump getting ramrodded by the Republican Party during the convention, then it more of a 'thems the rules' sort of deal.

:D

ccmanuals
05-12-2016, 01:57 PM
loop·hole
ˈlo͞opˌ(h)ōl/Submit
noun
1.an ambiguity or inadequacy in the law or a set of rules.
"they exploited tax loopholes"
synonyms: means of evasion, means of avoidance

Norman Bernstein
05-12-2016, 02:07 PM
It's a 'loophole' if you don't like something.

Hmmmm.... and it's not, if you do?

Tell me... do you actually think that hedge fund managers should be able to pay 15% on their earned income, as if it were NOT earned income, but dividends... and when the dividends actually come from someone else's investments?

Go ahead... spin it.

TomF
05-12-2016, 02:08 PM
Oh and one more thing, there is no such thing as a "loophole". I would say better terms would be poorly written laws and tax codes but ...While there are unintended errors every now and then, it's a mistake to presume that the people who actually write legislation don't put in exactly what they intend to. A neighbour of mine has been a lead legislative drafter for the Finance department here in my little part of the world for the past 15 years or so, and Tim's no bozo. If there's an exemption, a caveat, a neat little fillip to give a benefit somewhere for doing something ... it's intended. When one closes, that's intended too. Such things are not issues of bureaucratic incompetence, but of the well-informed choices of the governments which sponsored the bills.

A professor of mine in undergrad days had held a similar role with the Federal government before leaving in disgust. He told the same story that my friend Tim does.

Rum_Pirate
05-12-2016, 02:09 PM
...but Trump is advocating ending the estate tax... (and will insure that his kids, who didn't do a damn thing to earn the money, pay NOTHING in taxes on it).

So what if the children do anything to earn it?
Their father paid tax on it, right?
So now money in a family should be double taxed?

Norman Bernstein
05-12-2016, 02:16 PM
So what if the children do anything to earn it?
Their father paid tax on it, right?

No, he didn't.


So now money in a family should be double taxed?

An absolutely classic Republican/conservative LIE.

Far from being 'double taxed', most estates aren't even single-taxed, because the estates have grown through unrealized capital gains. Eliminating the inheritance tax means that those gains will NEVER be taxed....

...yet somehow, the right wing invents this 'double taxation' myth.

Gee, I wish *I* could be permitted to avoid all taxation on my capital gains.... but because I'm not a billionaire, I don't get that privilege.

Rum_Pirate
05-12-2016, 02:25 PM
No, he didn't.



An absolutely classic Republican/conservative LIE.

Far from being 'double taxed', most estates aren't even single-taxed, because the estates have grown through unrealized capital gains. Eliminating the inheritance tax means that those gains will NEVER be taxed....

...yet somehow, the right wing invents this 'double taxation' myth.

Gee, I wish *I* could be permitted to avoid all taxation on my capital gains.... but because I'm not a billionaire, I don't get that privilege.


Mr Trump has a 100% tax exemption with the IRS?

Why are you accusing of being 'right wing'.

IF and when they sell anything they would become liable for tax on it.

So when somebody works and pays income tax, then they use some of that tax taxed income on their children (whether by buying food, clothing or shelter ), the children should be taxed on that money?

TomF
05-12-2016, 02:26 PM
So what if the children do anything to earn it?
Their father paid tax on it, right?
So now money in a family should be double taxed?I know a family in Victoria BC where the grandfather bought a bungalow on Beach Drive for $22k back in the early 1960s. When he passed it on to his son in the late 1980s the same bungalow was worth about 20X that. If it were passed to the granddaughter today, it would be worth at least 50X the original selling price.

If the granddaughter inherits and sells the little bungalow for $1.2M, you figure whatever tax was paid by her grandfather on his $22K is fair? Even inflated for constant dollars?

Rum_Pirate
05-12-2016, 02:27 PM
Mr Trump has a 100% tax exemption with the IRS?

Why are you accusing of being 'right wing'.

IF and when they sell anything they would become liable for tax on it.

So when somebody works and pays income tax, then they use some of that tax taxed income on their children (whether by buying food, clothing or shelter ), the children should be taxed on that money?


Oh BTW why should everything have the life taxed out of it to the maximum?

TomF
05-12-2016, 02:28 PM
Oh BTW why should everything have the life taxed out of it to the maximum?To fund things like this (http://www.cbc.ca/news/health/healthy-baby-prenatal-income-benefit-1.3578029)?

Rum_Pirate
05-12-2016, 02:30 PM
To fund things like this (http://www.cbc.ca/news/health/healthy-baby-prenatal-income-benefit-1.3578029)?

Nope. The tax raised is far far greater that all of that x 6.

Norman Bernstein
05-12-2016, 02:34 PM
Mr Trump has a 100% tax exemption with the IRS?

He is supporting the elimination of the estate tax, which will cost the US Treasury $1 TRILLION over the next 10 years.


Why are you accusing of being 'right wing'.

Because the right wing has been arguing for the elimination of the estate tax, for decades. Since there is already an $11M estate tax exemption for couples, the elimination of the estate tax is EXCLUSIVELY a whopping tax break for the exceptionally wealthy, and a means of escaping not double taxation, not single taxation, but ANY taxation on the capital gains of the estate.

In short, it's a huge gift to the exceptionally wealthy.... and a screw job to the rest of Americans, who will either have to PAY for it in increased taxes, or in cuts to programs they depend on.


IF and when they sell anything they would become liable for tax on it.

You obviously know NOTHING about US tax law. If the estate tax is repealed, the heirs will have a 'stepped-up' basis on that wealth, and will only pay tax on further growth... all of the capital gains amassed before the death will have NEVER been taxed.


So when somebody works and pays income tax, then they use some of that tax taxed income on their children (whether by buying food, clothing or shelter ), the children should be taxed on that money?

That's a pretty SAD attempt at spin. EVERY American who invests and saves for their children, their retirement, or whatever, pays tax on the earnings of their investments. If the earnings are dividends or interest, they pay it when they earn it... but if it's unrealized capital gains, they don't pay it until they realize it. Eliminating the estate tax means that the capital gains of the estate will NEVER be taxed... not one penny of it.

ccmanuals
05-12-2016, 02:39 PM
Here is a excellent real life example.

http://www.nj.com/news/index.ssf/2010/07/george_steinbrenners_death_dur.html

delecta
05-12-2016, 02:50 PM
There is no need for a death tax, it takes care of itself. Rockefeller was worth 340 billion when he passed, today the remaining 200 Rckefellers have a combined worth of 10 billion with a majority held by one that actually did something. . Where did all the money go? I would guess 330 billion <which is a low figure due to interest paid> went back into the economy but I suppose some would think the government would do a far better job redistributing it and you wonder why thinking people despise liberals.

BrianW
05-12-2016, 02:53 PM
Hmmmm.... and it's not, if you do?

Sure, that's the common viewpoint. If someone is getting away with something we don't like, but within the law, we call it a loophole. If someone we deem deserving receives a positive outcome, via some obscure point of order, we say "that's the rules, live with it."


Tell me... do you actually think that hedge fund managers should be able to pay 15% on their earned income, as if it were NOT earned income, but dividends... and when the dividends actually come from someone else's investments?

Go ahead... spin it.

I never said anything about that. The failure to immediately jump on the latest Norman bandwagon does not automatically imply disagreement.

;)

Norman Bernstein
05-12-2016, 02:55 PM
There is no need for a death tax, it takes care of itself. Rockefeller was worth 340 billion when he passed, today the remaining 200 Rckefellers have a combined worth of 10 billion with a majority held by one that actually did something. . Where did all the money go?

Ridiculous analogy. Rockafeller died decades ago, and I don't know what his heirs did with the money. I'm talking about people TODAY, not decades ago.

It still begs the question: why should exceptionally wealthy people be permitted to escape the same tax that every one of us who is NOT wealthy have to pay?

You can't spin your way around this. An elimination of the estate tax will allow extremely wealthy people to pay NO tax on their capital gains, EVER.... will cost the treasury $1 TRILLION dollars over the next decade... and the resulting revenue shortfall will either have to be made up with MORE taxation on ordinary Americans, OR cuts in services that will hurt ordinary Americans.

So go ahead.... justify THAT, why don't ya.

Norman Bernstein
05-12-2016, 02:56 PM
Sure, that's the common viewpoint. If someone is getting away with something we don't like, but within the law, we call it a loophole. If someone we deem deserving receives a positive outcome, via some obscure point of order, we say "that's the rules, live with it."


Ahh, I see you're into vice-signalling now.

Rum_Pirate
05-12-2016, 03:00 PM
http://forum.woodenboat.com/images/misc/quote_icon.png Originally Posted by Rum_Pirate
Mr Trump has a 100% tax exemption with the IRS?



He is supporting the elimination of the estate tax, which will cost the US Treasury $1 TRILLION over the next 10 years. It won't 'cost' the Treasury anything. It will be money not taxed. That money will be reinvested to earn more - this results in more investment more jobs and ultimately more tax raised as a result of all that. If it is withdrawn (taxed) from individuals it stops earning. Society and growth then suffers.


http://forum.woodenboat.com/images/misc/quote_icon.png Originally Posted by Rum_Pirate
Why are you accusing of being 'right wing'.



Because the right wing has been arguing for the elimination of the estate tax, for decades. Since there is already an $11M estate tax exemption for couples, the elimination of the estate tax is EXCLUSIVELY a whopping tax break for the exceptionally wealthy, and a means of escaping not double taxation, not single taxation, but ANY taxation on the capital gains of the estate. If you have a problem with that write your representative etc and the next POTUS.

In short, it's a huge gift to the exceptionally wealthy.... and a screw job to the rest of Americans, who will either have to PAY for it in increased taxes, or in cuts to programs they depend on. Just how will the 'rest of Americans' have to PAY for it?


http://forum.woodenboat.com/images/misc/quote_icon.png Originally Posted by Rum_Pirate
IF and when they sell anything they would become liable for tax on it.



You obviously know NOTHING about US tax law. So they don't pay any tax on the Capital Gain that occurred from the time that they got it?


http://forum.woodenboat.com/images/misc/quote_icon.png Originally Posted by Rum_Pirate
So when somebody works and pays income tax, then they use some of that tax taxed income on their children (whether by buying food, clothing or shelter ), the children should be taxed on that money?



That's a pretty SAD attempt at spin. EVERY American who invests and saves for their children, their retirement, or whatever, pays tax on the earnings of their investments. If the earnings are dividends or interest, they pay it when they earn it... but if it's unrealized capital gains, they don't pay it until they realize it. Eliminating the estate tax means that the capital gains of the estate will NEVER be taxed... not one penny of it. So?

If you have a problem with that write your representative etc and the next POTUS.


Never understood why one should be crippled with taxes regardless of how rich or poor.

Nor do I see why because one earned money and saved, invested and prospered from doing that, (while others spent it another things* ) that one should be taxed again and further because of that decision to save and go without in planning for the long term etc.

Perhaps the US Tax Laws should be rewritten to make it more equitable for all. But how???







*
The ant works hard in the withering heat all summer long, building his house and laying up supplies for the winter.

The grasshopper thinks he's a fool and laughs and dances and plays the summer away.

Come winter, the shivering grasshopper calls a press conference and demands to know why the ant should be allowed to be warm and well fed while others are cold and starving. CBS, NBC, and ABC show up to provide pictures of the shivering grasshopper next to video of the ant in his comfortable home with a table filled with food.

America is stunned by the sharp contrast.

How can it be that, in a country of such wealth, this poor grasshopper is allowed to suffer so?

Then a representative of the NAAGB (The National Association for the Advancement of Green Bugs) shows up on Nightline and charges the ant with "green bias", and makes the case that the grasshopper is the victim of 30 million years of greenism.

Kermit the Frog appears on Oprah with the grasshopper, and everybody cries when he sings "It's Not Easy Being Green."

Bill and Hillary Clinton make a special guest appearance on the CBS Evening News to tell a concerned Dan Rather that they will do everything they can for the grasshopper who has been denied the prosperity he deserves by those who benefited unfairly during the Reagan summers, or as Bill refers to it, the "Temperatures of the 80's."

Richard Gephardt exclaims in an interview with Peter Jennings that the ant has gotten rich off the back of the grasshopper, and calls for an immediate tax hike on the ant to make him pay his "fair share".

Finally, the EEOC drafts the "Economic Equity and Anti-greenism Act," retroactive to the beginning of the summer.

The ant is fined for failing to hire a proportionate number of green bugs and, having nothing left to pay his retroactive taxes, his home is confiscated by the government.

Hillary gets her old law firm to represent the grasshopper in a defamation suit against the ant, and the case is tried before a panel of federal judges that Bill appointed from a list of single-parent welfare moms who can only hear cases on Thursday afternoon between 1:30 and 3:00 PM when there are no talk shows scheduled.

The ant loses the case.

The story ends as we see the grasshopper finishing up the last bits of the ant's food while the government house he's in -- which just happens to be the ant's old house -- crumbles around him since he doesn't know how to maintain it.

The ant has disappeared in the snow.

And on the TV, which the grasshopper bought by selling most of the ant's food, they are showing a wildly applauding group of Democrats announcing that a new era of "fairness" has dawned in America.

BrianW
05-12-2016, 03:01 PM
Ahh, I see you're into vice-signalling now.

That's twice now that thread, or rather the topic of that thread, has come up. I really don't want to wade through that mess, please find another analogy.

;)

Norman Bernstein
05-12-2016, 03:14 PM
That's twice now that thread, or rather the topic of that thread, has come up. I really don't want to wade through that mess, please find another analogy.


I would, if I could think of one that wasn't as perfectly suited as 'vice-signalling'.

Norman Bernstein
05-12-2016, 03:31 PM
It won't 'cost' the Treasury anything. It will be money not taxed.

It will be a shortfall in revenues of $1 TRILLION dollars over the next decade. Since estates are currently taxed (over the $11M exemption), it will mean the following: BEFORE, the money was coming in.... but THEN, the money will stop. If you were living on $100,000 per year, and suddenly, your salary was cut to $50,000, you don't think there would be a plapable effect?


That money will be reinvested to earn more - this results in more investment more jobs and ultimately more tax raised as a result of all that. If it is withdrawn (taxed) from individuals it stops earning. Society and growth then suffers.

Doubling down on 'trickle down' economics, I see.... despite the obvious evidence that it doesn't work? No, the money will not be 'reinvested'.... it's ALREADY invested.


Just how will the 'rest of Americans' have to PAY for it?

They will pay for it with reduced services and benefits. We saw this clearly in the government shutdown of a few years ago; a national park had to close, due to lack of government revenues to pay for its operation.... which resulted in an instant drop in tourism... which meant the every person making their living from tourism in that park suddenly lost income.... which meant that the businesses who served those people saw a drop in business... and on, and on, and on.

You can't possibly be sincere about not understanding how ordinary Americans pay, when tax revenues decline.... or can you?


So they don't pay any tax on the Capital Gain that occurred from the time that they got it?

No.

When someone dies and passes on an inheritance, that inheritance is exempt from estate tax, up to a limit of $11M (per couple). No tax is assessed on that money. The couple who inherits it could sell all the investments from the estate and not pay a single dime of tax on it... and since much of that inheritance is likely to consist of capital gains, NO ONE paid any tax on it.

From that point on, the 'basis' price of the investments is the value, as of the date of death. If the couple keep the money invested, then any FURTHER growth or yield on the investments will be taxed... but the original principal is not taxed, nor will it ever be.

What does repeal of the estate tax mean? The $11M exemption becomes an infinite exemption.... so the money inherited will never be taxed. Donald Trump's kids, for example, could inherit the supposed $10B of his worth without paying a dime.

I support a reasonable exemption for estates... and the current $11M exemption is fair. A repeal of the estate tax is NOT fair.


Never understood why one should be crippled with taxes regardless of how rich or poor.

Understandable, if you don't drive on roads built and maintained with tax dollars, send your kids to public schools, take drugs whose essential molecules were researched by government supported labs, visited a national part or monument, or use ANY of the services and benefits that citizenship conveys.


Nor do I see why because one earned money and saved, invested and prospered from doing that, (while others spent it another things* ) that one should be taxed again and further because of that decision to save and go without in planning for the long term etc.

You keep talking like you actually BELIEVE in the 'double taxation' myth. I've explained it to you.... if you don't understand it, well then.... as a wise person once said, you can't explain something to someone who doesn't want to understand.



Perhaps the US Tax Laws should be rewritten to make it more equitable for all. But how???

My Triple Ramp tax plan. I should probably post it again.

Hugh Conway
05-12-2016, 03:47 PM
Sure, that's the common viewpoint. If someone is getting away with something we don't like, but within the law, we call it a loophole. If someone we deem deserving receives a positive outcome, via some obscure point of order, we say "that's the rules, live with it."

It's pretty common for conservatives to completely ignore the substance of the issue when it benefits a class they like.

Carried interest was never intended, nor should it, reward the people it currently is. It was a benefit for risk. Not a tax shelter for salary. Yet again conservatives wish to continue perverting the tax code to an end they like (less taxation) completely oblivious to the perversions contributing to an even more byzantine and bureaucratic tax system favoritism.

Too Little Time
05-12-2016, 05:25 PM
Hmmmm.... and it's not, if you do?

Tell me... do you actually think that hedge fund managers should be able to pay 15% on their earned income, as if it were NOT earned income, but dividends... and when the dividends actually come from someone else's investments?

Go ahead... spin it.

You do understand that what they do complies with the law. At least the IRS says it does. And perhaps the tax court does also.

I recall you wanted a tax break on capital gains that are reinvested. It is fair to say you are not happy enough with either the preferred treatment of realized capital gains or even the better treatment of unrealized capital gains.

Norman Bernstein
05-12-2016, 07:54 PM
You do understand that what they do complies with the law. At least the IRS says it does. And perhaps the tax court does also.

This is one of several legal tax avoidance opportunities that are just morally and ethically WRONG. I NEVER said it was illegal... just that it was outrageously unfair and wrong.


I recall you wanted a tax break on capital gains that are reinvested.

You recall wrong... or, at least, I have no idea wht you're talking about. My tax scheme that I once posted (way back when we knew you by a different name) advocated something different.


It is fair to say you are not happy enough with either the preferred treatment of realized capital gains or even the better treatment of unrealized capital gains.

No, its a STUPID thing to say.... and completely misrepresents my opinions.... but that's what you ALWAYS do, with everyone.

In any event, the last person I'd care to explain my beliefs to, would be the guy who claims that Obama's budget deal means $50K to $100K in tax free income. If you can't explain that, why would I bother to explain anything to you?

Too Little Time
05-12-2016, 10:06 PM
You recall wrong... or, at least, I have no idea wht you're talking about.

post 16 in the thread: http://forum.woodenboat.com/showthread.php?201377-Bernie-Sanders-Financial-System-Plan


In my triple ramp plan, NO tax would be due as long as the results of the sale are reinvested

That advanced Google search really works.