Folks, you thought “injustice” was all about police brutality in the Black community, the abuse and torture of immigrants on our southern border, gross economic inequality that has seen wealth accumulate at the upper socio-economic strata, the environmental degradation of our planet, but particularly focused on poor communities, rampant propaganda and misinformation in the right-wing echo chamber, attacks on a woman’s right to choose, and evil demonizing of transgendered individuals. And that’s just scratching the surface!
But no, it turns out that’s nothing compared to the plight of our nation’s bullied, ostracized, and demonized hedge fund and private equity billionaires.
They are being “reverse discriminated,” yo.
Before you take a knee-jerk stance against these embattled Americans, take a moment to witness the abuse they might suffer under President Joe Biden’s proposed elimination of the carried-interest loophole so beloved by the finance industry.
Under the Biden carried-interest plan, the average partner at a major private-equity firm, who would make $30 million in carry if certain returns are met, could expect to pay about $13 million in taxes, up from $7 million under the current system, according to a Bloomberg analysis of pay data by recruiting firm Heidrick & Struggles.
If you don’t grasp the extent of the cataclysm facing this industry, the average private equity partner’s take-home compensation would shrink from $23 million to $17 million. How are they supposed to make ends meet with just $17 million, when $23 million was formerly in the cards? If Biden won’t retreat from this lunacy, some of these people—particularly ones living in high-tax states, might pay 60% of their compensation to help fund important programs and infrastructure upgrades. Why, that average partner making $30 million in compensation may be left with a measly $12 million. JUST $12 MILLION, people!
Opponents of tax increases on the wealthy have been arguing that even the slightest increase will send affluent New Yorkers fleeing to Florida, the would-be Wall Street South. That may already be happening. Almost 10% of New York-area residents who moved during the pandemic fled for one of the nine states without income tax — and the bulk of them went to Florida, according to U.S. Postal Service data.
Ninety percent of New Yorkers who moved during the pandemic didn’t move to low-tax states, so we need to panic over a few assholes moving to Florida, ready to give up some of the world’s best cuisine and cultural amenities for … golf? Can’t have that! Can’t you see this is madness?
Please, just for a second, look beyond these embattled hedge fund managers and think of the businesses they won’t invest in, choking off the engine of American ingenuity. Why would anyone work in a business where their average compensation would be just $12 million? Would you? Of course not!
Some are expecting the changes to prompt early retirement.
Can you imagine? Some people might retire! And there will be no one left willing to work for $12 million poverty wages! [Insert wailing and teeth gnashing here.]
FIGHT FOR $30 [million]! Fight for $30 [million]!
Okay, okay, in all seriousness, that article is actually really good, with little sympathy for the whiners—few of which were willing to speak on the record, proving again that they’re not just insufferable out-of-touch whiners, but they’re cowards as well. And perhaps it’s for the best, because the last time Democrats broached eliminating this loophole, back in the Obama years, hedge fund billionaire Steve Schwarzman claimed “It’s a war! It’s like when Hitler invaded Poland in 1939.”
Yeah, best to keep their traps shut.
And the article closes with this quote, which is actually quite fantastic:
[I]f private equity is so good at what it does, it shouldn’t need a tax loophole to make money.
“You can make billions of dollars in this industry if you’re good and if it’s taxed at 43%, oh well,” said Elizabeth Edwards, founder of H Venture Partners, a Cincinnati-based venture fund. “You’ve got $600 million instead of $1 billion. You can’t take it with you.”
Truth. This corner of the finance industry has had a free ride for too long. It’s well past time to end this unfair loophole.
And once we do that, we can set our sights on a real wealth tax, and further rectify the economic wealth imbalances that are a scourge on our country. This tax adjustment wouldn’t raise that much new money—just $14 billion over the next decade. But that’s nearly one and a half billion that would shift from the wealthiest one percenters to the public coffers. It would make the tax code a little more equal and fair, and would be a good start towards clawing back the advantages enjoyed by our nation’s wealthiest.
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