21–30 of 306 posts
Taxation of carried interest as capital gains makes absolutely no sense - I can't think of a better example really to illustrate "one set of rules for the rich and another for everyone else.'
> 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.
Taxation of carried interest as capital gains makes absolutely no sense - I can't think of a better example really to illustrate "one set of rules for the rich and another for everyone else.'
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…
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…
Yes, but as the parent article states, and even what is pointed out in your own link, while dividends are taxed at a lower rate, the manager is paid the lower rate on capital that is not his to begin with . That's the part that makes no sense to me. It is quite simply an incentive payment for his labor: it's income that investors pay him for his expertise, and as such should be taxed at income rates.
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?
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…
Yes, but as the parent article states, and even what is pointed out in your own link, while dividends are taxed at a lower rate, the manager is paid the lower rate on capital that is not his to begin with . That's the part that makes no sense to me. It is quite simply an incentive payment for his labor: it's income that investors pay him for his expertise, and as such should be taxed at income rates.
Earlier quoted context omitted.
Yes, but as the parent article states, and even what is pointed out in your own link, while dividends are taxed at a lower rate, the manager is paid the lower rate on capital that is not his to begin with . That's the part that makes no sense to me. It is quite simply an incentive payment for his labor: it's income that investors pay him for his expertise, and as such should be taxed at income rates.
I think harryh ‘s comment states everything I could but much more succinctly, so I’ll just second his statement.
Taxation of carried interest as capital gains makes absolutely no sense - I can't think of a better example really to illustrate "one set of rules for the rich and another for everyone else.'
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…
Taxation of carried interest as capital gains makes absolutely no sense - I can't think of a better example really to illustrate "one set of rules for the rich and another for everyone else.'
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…
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 - great news and great hope for humanity in these times. The foundation of the U.S. is that all are created equal, and after that it's a land of opportunity where merit wins out, not inherited wealth and corruption.
If by that you mean that rich have been getting richer relative to others, that's certainly not true. In the U.S. it's been true since the 1980s, but it fluctuates and in most other advanced economies the proportional difference (the disparity) is much less.
If you mean that there is not downward social mobility for the rich, that's also not true. I don't have the numbers, but I've read about research that overall social mobility (up and down) is significantly less than it was before Reagan. There's also the old American family story: Rags to rags in 3 generations. More concretely, the U.S. used to have higher taxes on the high income, and more importantly, a (much higher?) estate tax: Inherited wealth is not merit, but effective aristocracy. That said, I don't know the inter-generational overall trends of wealthy families.
(Or maybe the parent means something else.)
EDIT: Some clarification + the last sentence
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…
As opposed to the young white guys that overwhelmingly dominate VC in that age group. What an obviously racist, bullshit statement. It's directly accusing Fred Wilson of being a racist (that his motivation is racial in nature), casually, like it's no big deal. It's nothing more than pandering to put that in as an argumentation point, it indicates intellectual weakness on the part of the author.
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 for the former than the latter.
I'm sick of people complaining about pulling their weight or saying they are too important to do so. Should taxes (and other laws) now be contingent on the government's judgment of your importance? I suppose the unimportant poor should cover the share of these extra-important wealthy.
Personally, I'm kind of proud to pay my taxes and contribute to the enterprise of my democracy.