Friday, July 08, 2011

'Toontime: Deep Do-Do

[credit: Tim Eagan]
Watching a television show about an auction of collectible cars in which rare vintage vehicles sold for millions of dollars, US Person was reminded about what the rich do with their extra cash. A wealthy patron boasted about how he combined his hobby of car collecting with "community action" by training picked high-schoolers to restore his vehicles and polish the chrome. He called it skills training the teenagers could take with them. Just goes to prove that in an Amerika with lowered expectations, you too can be a rich man's chrome polisher!

But wait, if you are a hedge fun manager it gets even better!  There is a loophole in the tax code that Repugnants, the rich man's lackey, are fighting tooth and nail to preserve.  Managers are compensated in part by bonuses based on a percentage of their funds' profit.  Despite being a performance based compensation, i.e. wages, these bonuses are treated as long term capital gains and taxed at only 15% instead of 35% for earned income.  This pernicious "carried interest" loophole costs the federal government an estimated $20 billion or more over ten years.  If the 25 richest hedge fund managers had to pay ordinary earned income tax it would raise $4 billion or the combined income of 441,000 middle class families.  You do not have to be a commie to be angry about such flagrant economic injustice.