Reader comment on: Obama Versus the Billionaires
Submitted by Adam (United States), Sep 21, 2010 10:31
You make it sound like Buffett has some way of raising taxes on his competitors without raising them on himself. Your second jab at the Sage of Omaha is quite fair, so I don't know why you felt compelled to double down with a false and lousy innuendo.
More importantly, do you actually have an argument for why hedge fund managers shouldn't pay the normal tax rate on their income, as opposed to their capital gains? Let's be clear here. Hedge fund managers should not be taxed at a higher rate than everyone else. Nor should they be prevented from paying capital gains rates on their OWN capital gains. But they should have to pay normal income taxes on money they receive for managing other people's money. For them (as opposed to their clients) these are not capital gains and should not be taxed as such. They are a management fee, i.e. regular old income.
If you don't like income taxes, rail against the sixteenth amendment. But defending only the special privilege of a few makes you look like you're trying to ingratiate yourself with those so privileged.
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The Future of Capitalism replies:
I dealt with this here I think
Hedge fund managers (and managers of other partnerships...real estate. private equity, Venture capital, oil and gas) already do pay the normal tax rate on their income. Even the incentive portion, in hedge funds that trade frequently, the carry is subject to the short-term tax rates. It's long term cap gains that we are talking about. It's not the special privilege of a few -- lots of partnerships are taxed this way. Same as founder's stock in a startup.
If this goes through Buffett would be raising taxes on his competitors without raising them on himself because he pays long term capital gains rate on his gains, while his competitors would be paying ordinary income rates on theirs.
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