What Donald Trump Doesn’t Know about Hedge Funds

National Review ^ | September 22, 2015 | Kevin D. Williamson

[expat_panama]

Donald Trump has promised that he will ease burdens on the middle class by going after “the hedge-fund guys,” who, he believes, do not pay enough in taxes. “They’re making a tremendous amount of money — they have to pay taxes,” he says. Because the one thing in which Trump is consistent is his vagueness, it is not 100 percent clear whether what he is talking about is the so-called carried-interest loophole, which is very much on the minds of people with economic-policy views similar to Trump’s — meaning Bernie Sanders and Hillary Rodham Clinton and other cookie-cutter progressives — but...

[snip]
 

The myth is this: Hedge-fund managers take home tremendous paychecks that are really plain old payments for services but which are disguised as long-term capital gains, meaning that they get taxed at 15 percent rather than the 39.6 percent I pay on my salary, which is fundamentally unfair.

The thing about myths is, they’re myths.

If you will forgive a brief little dip into finance gobbledygook,...

[snip]

RELATED: The Stock Market and the Limits of Class Warfare
 

The carried-interest question is in fact something that is rarely very relevant to hedge funds. It is of much more interest to private-equity firms, which are a different animal. Hedge funds are.

[snip]

RELATED: Why Compare the Earnings of Kindergarten Teachers and Hedge-Fund Managers? Class War!
 

Carried interest — a share of the profits from a company or an investment paid to the investment manager as a form of payment beyond funds invested — is...

[expat_panama]

Actually the title of the essay is wrong, that we're can't know if Trump is wrong, we only know here that what he's saying is wrong.  He may actually know better but is making a deal w/ the voters.  Other related facts that we may want to keep in mind:

• Trump talks too much about about raising taxes.
• He changes his mind on things.
• He's probably going to be the next President.
• This will be not only a vast improvement but will also probably be a very good thing.

[Wolfie]

It’s why we’ll never have a Flat Tax. The super wealthy aren’t going to give up bullshit loopholes like carried interest.

[humblegunner]

http://www.freerepublic.com/focus/f-news/3339822/posts

[DH]

“we only know here that what he’s saying is wrong.”

REALLY? Oh, wise one....tell us more for we are only ignorant serfs of our government and need your guidance.

[Lurkinanloomin]

The Ministry Of Propaganda is in a full court press to try to take Trump’s numbers down.

The Cheap Labor Express is very worried........

[ZULU]

All I need to know about hedge fund people is that bastard who bought the drug company driving costs per pill from $7.50 to $750 overnight. People like him are equivalent to corporate raiders and crony capitalists. Produce nothing but profits for themselves. Totally agree with Trump.

[wastoute]

LOL!

[Sacajaweau]

You may have a flat tax....applying it only to earned income, i.e., wages. There will always be other taxes.....like Health Insurance taxes....corporate taxes...utility taxes.

[Sacajaweau]

Since that Med is replaceable....I think the little twerp just lost a bundle.

But I believe it is for AIDS....so it is probably a "paid by Medicaid" drug....

[expat_panama]

Wow, good morning it's a lovely new day!  Yesterday stocks tanked over a % in heavier trade but that may be a good kind of basing/profit taking --witness today's stellar futures view for stocks today at +0.53%   Metals ain't too shabby neither seen this AM at +0.73% and gold/silver are now at $1,126.30/$14.86.   Econ reports  today are just MBA Mortgage Index and Crude Inventories.  Elsewhere:

• China factory slump casts pall but Europe pierces gloom Reuters - 7:50am LONDON Global shares fell on Wednesday after figures showing the biggest contraction in China's manufacturing sector since the global financial crisis intensified fears that a slowdown in the world's second-largest economy will spread more widely.
• Oil nears $50 as U.S. stock-draw balances China data
• Now We Know What Putin Is Up To In SyriaU.S. officials have begun to reveal the kinds of military equipment Russia has been moving into Syria, leaving little doubt that they are establishing an air base in the war-ravaged country. SLIDESHOW: ...The Fiscal Times
• As Investor Confidence In U.S. Falls, What It Means - John Shmuel, NP
• How Fed Inaction Changes the 2016 Election - Zachary Karabell, Politico

Ah, happy first day of Autumn too.

[Sasparilla]

10% of the 50 stories on the FR page where this thread was found at the top were about Trump.
That % has been fairly consistent since he announced.
He’s dominating FR.

[SaveFerris]

They are scared their cash cow is going down.

Well, hey, if I’m starving, then I’ll enjoy watching them collapse, too.

They destroy the middle class, excuse us while we watch you join the rank and file.

I’m sick and tired of these sellouts. Beyond sick and tired. Welcome to the party, boys.

[expat_panama]

...bullshit loopholes like carried interest.

Not interested in reading the article today are we?

[expat_panama]

Cr@p.

Forgot to check and I usually do. 8P. Ah well, hope they don’t pull this thread...

[ncalburt]

NRO has outed it self as Hate website dedicated to destroying the YS fir the Slave Labor Billionaires and K Street Lobbyist who want to wipe out the middle class for Fat Cat Hedge Fund Libs ! NRO is the enemy of the little guy.
NRO and anyone who peddles their lies and hate can go to hell!

[Alberta's Child]

"Carried interest" isn't exactly a loophole. It's just a mechanism for paying capital gains taxes instead of income taxes. In high income brackets the difference between the two rates is meaningful, but this is hardly the "loophole" it's being made out to be.

The question of whether these earnings should be reported as income or capital gains is a legitimate one, but the controversy over this -- including Donald Trump's public statements -- is nothing more than political pandering.

[Alberta's Child]

How much do you charge for the life-saving drugs that you produce?

[expat_panama]

10% of the 50 stories on the FR page where this thread was found at the top were about Trump.

Trying to figure out that statement over my first coffee, but I think it means FR has focused on Trump and I'm not sure that's bad.

[9YearLurker]

Trump knows more about hedge funds than this chump does.

Trump is a good communicator, and he’s telling average voters that in balance with reducing corporate taxes to help the economy, he’ll trim some ways that the wealthy get special treatment.

And sure, VC especially is good for the economy, but that doesn’t mean VC bonuses have to be tax advantaged. Maybe if anything he gives reason to reconsider how stock options are taxed once exercised.

[ZULU]

I hope you never need a lifesaving drug that goes from a $7.50 a pop to $750 a pop. This d——e bag just spent a fortune to buy a company knowing he had to inflate product cost to this level to recoup a profit at the expense of people who are helpless. Personally I don’t care what the drug treats, and, unlike legitimate pharmaceutical companies, NONE of that money goes into new product development. I hope he burns in hell.