The public pension community, including its various associations, needs to stand up to the carried interest lobbyists and marketeers and tell them to back off. What are the managers going to do? Cook up fewer deals? Pull up stakes and move to a tax haven? Demand even higher fees on top of their already cushy income? They can huff and puff all they want, but pensioners would lose nothing if the loophole were plugged. The reality is that if the fund managers had to pay standard tax rates on their income, it would have zero impact on pension systems’ returns. The legal fiction of calling these back-end payoffs a pseudo-security to rationalize their capital-gains tax preference is political hocus-pocus. So their carried interest is essentially bonus compensation. They spend no more time doing their work than top-rated institutional fund managers who trade in public securities, yet they are paid lavishly along the way while doing that. These tax-dodgers don’t have to invest their own money to win carried interest tax rates. There is no societal benefit from the tax preference allowed for carried interest. These money managers put neither their lives nor their own money at risk, but still get the carry, most commonly 20 percent of net profits, and that’s on top of their annual management fees, which are two to three times what traditional portfolio managers get. Nowadays most seafaring shippers have private insurance on their cargos, and carried interest is now all about financial partnerships, not marine transport and seaborne piracy. It was in his direct interest to carry the goods home in good condition, and thereby arose the term. So they invented the novel concept of carried interest, which was the captain’s 20 percent share of the profits on the cargo he brought back. The financiers wanted some assurance that the captain wouldn’t jump ship at the first sign of trouble or yield control of the vessel without a fight.
Ships laden with treasure and goods could sink or disappear for any number of reasons, including piracy. It goes all the way back to the medieval times of the European ship captains and trade merchants who would raise royal and private money to fund an expedition. Readers may wonder where the term “carried interest” came from. Of course, there is no evidence, let alone proof, of this. The premise of the private equity lobbyists who defend their carried interest tax loophole is that if somehow the income of the promoters and money managers were taxed at the same rates as everybody else, the value of pension fund investments would fall out of the sky. The PR firms orchestrating this nonsense will just keep it up until their profiteering clients get called out. It’s high time for political and financial blowback. Public pension funds, public employees and their associations need to put a stop to this, and they have both the moral high ground and the clout to do so. This is blatant, cynical misrepresentation. It’s all Madison Avenue hogwash to con ordinary Americans and voters into thinking that somehow the livelihoods of public-sector workers and retirees will be horridly impaired if Congress were to close tax loopholes and approve anti-monopoly legislation. What these two recent events have in common is a clever and manipulative strategy of hiding private-sector financial interests behind the skirts of public employees, retirees and their pension plans.
#Ebook manager leave files alone tv
Some readers may also be watching the TV commercials by Silicon Valley-backed political groups fighting antitrust legislation that might hinder their growth rates, lucrative merger opportunities and oligopoly market-pricing power. Kyrsten Sinema torpedoed a provision in the Senate compromise bill that would have finally closed the so-called “carried interest loophole.” That’s where savvy real-estate financiers and managers of private partnerships such as hedge funds and private equity deals are able to cut their income taxes as much as 40 percent by masquerading their compensation as a capital gain that enjoys much lower income tax rates. ( American Edge Project)If you followed the saga of the route to passage of the Inflation Reduction Act, you already know that a last-minute maneuver by Arizona Sen. A video ad featuring a retired schoolteacher worried about her pension is part of a tech industry campaign fighting proposed federal antitrust legislation.
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