Monday, August 24, 2015

Why Trump's "attack" on hedge funds was nothing of the sort

Most of the coverage I've seen about Trump's so-called attack on hedge fund managers gets it all wrong. Allegedly Mr. Trump is taking these guys to task for paying less than their share of taxes. Instead of paying at the "income" rate of 39.6% that the peons pay, they're using the "carried interest loophole" and other magic tricks to pay a mere 20%, which is the capital gains tax rate.

So the big boys are paying 20% on their profits, are they? Not bloody likely! Oh ya, maybe on the few profits they declare in the US, but what kind of doofus keeps his money in the US when the world is awash in tax havens where you'll pay little or nothing?

Remember the hoo-ha over the Mittster's financial revelations before the last election?  On the face of it, Romney was paying a tax rate of 15% on gains declared in the US. Sure, that's enough of a scandal, but myriad investigative journalists never really got to the bottom of what's in those Romney accounts in Luxemburg, Cayman Islands, Bahamas...

That's the REAL scandal!

Trump has done a valuable public service in shining a light on these non-productive paper-shufflers. But Trump himself is well aware that the problem is not the 20% capital gain tax rate.

The real problem is the hundreds of billions that successful American corporations and wealthy individuals deliberately offshore in tax havens to avoid paying any share of their US tax burden.

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