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Tuesday, July 5, 2011

Immoral Tax Break Given to Hedge Fund Managers

Immoral Tax Break Given to Hedge Fund Managers

"currently subject to a maximum tax rate of 15 percent, rather than being taxed as ordinary income, currently subject to a maximum tax rate of 35 percent.
But a moment’s analysis shows that this money is ordinary income by any fair definition and should be treated that way. The 20 percent fee is not capital gains, because it applies not to capital that the hedge-fund manager has invested, but to the payment he receives for investing capital that other people provide.  Pretending that the 20 percent fee is capital gains when in fact it is payment for a service is an Alice-in-Wonderland argument that elevates fiction over fact..."

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