41–50 of 306 posts
Earlier quoted context omitted.
> one set of rules for the rich and another for everyone else The rich (LPs) aren't the ones getting carry, it's the GPs who get carry.
Many hedge fund managers are plenty rich, oftentimes orders of magnitude more than some of their clients.
Earlier quoted context omitted.
You & I start a company. I provide $100,000 in seed money but little actual work/time. You provide no seed money but a lot of work & time. We agree to split ownership of the company 50/50. 5 years go by. We sell the company for $1,000,000. You get $500,000, I get $500,000. Should I get to pay a lower tax rate than you?
This analogy doesn't work; carried interest isn't granted because of any sort of ownership stake.
Counterpoint from Matt Ocko (DCVC): https://twitter.com/mattocko/status/1005367508910596096 1/ TL; dr: “Having gotten immensely rich in part due to a tax break, I now solemnly opine that it should be denied to others... with no consequence to me...” This is “pulling up the rope ladder behavior” - here’s why: 2/ Fred’s stance screws over underrepresented VCs the most... They are most likely to have smaller funds that…
This isn't a tl;dr, you're pasting the entire contents of someone else's twitter thread into an HN discussion. That's confusing and generally not good since it's not your comment and that person is presumably not here to participate in the conversation.
Earlier quoted context omitted.
You & I start a company. I provide $100,000 in seed money but little actual work/time. You provide no seed money but a lot of work & time. We agree to split ownership of the company 50/50. 5 years go by. We sell the company for $1,000,000. You get $500,000, I get $500,000. Should I get to pay a lower tax rate than you?
No. You shouldn't. The person doing the actual work should be paying it as tax on labor, and the person who put up the funds should be paying it as capital gains. And obviously, capital gains should be taxed at a rate greater than labor.
Earlier quoted context omitted.
Carried interest is effectively the General Partners share of the dividend. Dividends are taxed at a lower rate than ordinary income, so this is as well. This is true whether you’re poor and own one share of a dividend paying stock, or you’re Ray Dalio. Here a pretty good breakdown of how it works and why it makes sense [0]. To be clear, I’m not saying you have to like it, but the rich have been getting richer since…
> the rich have been getting richer since the beginning of time That's not true and we must be careful not to accept an aristocracy (or oligarchy) as inevitable. That the wealthy will inevitably hold and consolidate power is counter to the history of democracy, a specific rejection of aristocracy, and a system which has worked the other way in country after country to great success economically and politically - grea…
So yes, the rich get richer, and high taxes do not stop that (but present the illusion that it stops ).
I’ll gladly admit I’m wrong if you can disprove my three simple examples. Last I hexked, they were R I C H.
We can argue rules, technicalities and definitions, but here's the overriding one: Everyone needs to pull their weight, pay their share. Nobody is more important than anyone else. Pulling your weight means equal sacrifice. It might be hard to calculate the equal sacrifice of someone making $20,000 and someone making $20,000,000, but I can tell you that $1,000 (EDIT: or 20% of income) is a heck of a lot more sacrifice…
I assume that means you feel we should all pay income tax at the same percentage. I agree with you completely.
Either pay the additional amount you think is fair and complain about it or take the tax break and don’t. But please don’t complain about it while simultaneously benefitting from the that which you say is wrong.
Earlier quoted context omitted.
You & I start a company. I provide $100,000 in seed money but little actual work/time. You provide no seed money but a lot of work & time. We agree to split ownership of the company 50/50. 5 years go by. We sell the company for $1,000,000. You get $500,000, I get $500,000. Should I get to pay a lower tax rate than you?
No. You shouldn't. The person doing the actual work should be paying it as tax on labor, and the person who put up the funds should be paying it as capital gains. And obviously, capital gains should be taxed at a rate greater than labor.
You want to make it more expensive to increase productivity? (Because that’s what capital does - it gets invested to increase profits).
The logical path you’re going down would replace road builders with people with spoons to move dirt around and file down rocks with spoons to put them in the ground to walk on.
Seriously, if you consider the logical conclusion of your argument, we end up in madness.
I get annoyed when smart, wealthy people say that tax laws need to change while at the same time take advantage of the tax break becuase it’s ‘the government’s job to fix.’ Either pay the additional amount you think is fair and complain about it or take the tax break and don’t. But please don’t complain about it while simultaneously benefitting from the that which you say is wrong.
We can argue rules, technicalities and definitions, but here's the overriding one: Everyone needs to pull their weight, pay their share. Nobody is more important than anyone else. Pulling your weight means equal sacrifice. It might be hard to calculate the equal sacrifice of someone making $20,000 and someone making $20,000,000, but I can tell you that $1,000 (EDIT: or 20% of income) is a heck of a lot more sacrifice…
> Pulling your weight means equal sacrifice I assume that means you feel we should all pay income tax at the same percentage. I agree with you completely.