Reading about the lobbying attempts to permit private equity and some hedge fund managers to continue to pay a paltry 15% tax on their fat paystubs by labeling part of the compensation "investment income" what could i say? Business as usual in Washington DC.
The corrosive effect of lobbyists continues with special treatment for salaries derived, in part from profit sharing. Unlike the "little people" who pay taxes, the rich receive special treatment cloaked in procorporate pro-business rhetoric. Nothing new i suppose, but this is what got to me.
Lowenstein said at least four ``moderate, centrist'' Senate Democrats -- John Kerry of Massachusetts, Ken Salazar of Colorado, Charles Schumer of New York and Ron Wyden of Oregon -- have expressed skepticism about the plans to tax fund managers' share of profits at the top 35 percent rate, rather than the 15 percent capital-gains rate. He said opposition to the tax is growing among House Democrats, without identifying anyone.
For more information, the link is below:
http://www.bloomberg.com/...
Follow me below the fold:
The Private Equity Council was created in December 2006 by firms such as Blackstone, KKR, the Carlyle Group, Apollo Management LP, Bain Capital LLC, and Madison Dearborn Partners LLC.
With the usual tactic the Council, is trying to distract attention from enormous payouts to private equity firm managers, by enlisting "middle market firms" to broaden opposition.
Because such rampant unfairness would be recognized by any aware voter for what it is, rampant special tax breaks for the rich, the Council, is using a different approach:
The council calls it a "grasstops'' approach, relying on industry leaders rather than grassroots voters to influence lawmakers. Lowenstein said it's the newest prong in a strategy to counter legislation that would more than double tax rates for managers of private-equity firms, many hedge funds, and partnerships that pay general managers with a share of profits known as "carried interest.''
Sound like the garden variety profit sharing for which most all workers are fully taxed.
And in a further example of the corrosive effect of lobbyists on politics, heres the kicker:
The council has funded research to buttress its argument that higher taxes would hurt the economy, and encouraged the industry to more than quintuple its donations to lawmakers' re- election campaigns, including $1 million to Senate Democrats in June.
These firms are even working against legislation that would leave in effect this loophole for 5 years (Baucus-Grassley Bill ) before paying the corporate 35% rate.
Here's the text of some cards i sent the four senators:
Dear Senator (Cave-in),
I was extremely dissapointed to read in Bloomberg news (Aug 31) about your caving in to lobbyists for the Private Equity Groups and Hedge funds that have made massive profits the last several years. To allow the managers of these groups to be taxed at the capital gains rate for gains made from profit sharing is inherently unfair.
Millions of worker across the country may receive benefits designated as profit sharing. All of them are taxed at the regular income tax rate.
The fact that Senate Democrats are receiving lobbying donations is all the more egregious.
Work should not be taxed more than wealth.
I hope you will reconsider your position. I will be calling your office soon to follow up and will let my California legislators know that they must stand for tax fairness and equity.
Please support the Bill by Rep Levin (Michigan) and Charle Rangel (NY) that would end this blatent injustice.
sno ryder
I think some light needs to be shined on our Dem Representatives on this issue. What about you?