Wallstreet's "acid test" for Democrat Presidential candidate to receive their financial backing . . . Support "Carried Interest" . . Leave it alone

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(edited)

If nominated candidate does not support continuing "carried interest" no money from Wallstreet  for Dems.

No money = No win.

" Carried Interest" is the tax loophole that allows Hedge funds , Private Equity Firms and Investment Bank employees defer paying income taxes indefinitely. 

For example : Mitt Romney majority of his pay is a shared interest in Bain Capitals incident funds.  He gets shares.  He pays no income  taxes on that pay until he cashed out those shares, and only on the capital gain taxes attributed . That's how he amassed $400 million net worth. Then he divides the $400 million between his sons in a living trust. Again no income taxes.  When ever he passes those shares pass to his sons at the present value not the value when he was given those. Mitt pays very little tax on his $400 million.

Congressman Levin put up a carried interest bill in 2008. Defeated.  Again after Obama election when Dems controlled House, Senate and Whitehouse.  Obama killed it.  When Obama started his own Foundation (Why should Clinton make all that money) the first in line were all the Hedge Funds (Blackrock, etc)

Two of the Dem contenders , Deval Patrick (Bain Capital) and Styer (Farrallon) and Joe Biden so Hunter all benefited from "carried interest".

it would be interesting to see if Joe Biden was an employee of any of the hedgefunds his sons set up. If yes, he directly benefited from Ukraine and China .  Love to see the clients whom had money managed by Hunters Rosemont firm.  More than Chinese investors. ?

Democratic voters and debate moderators should have their "acid test" for nomination be, " will you do away with the largest income tax loophole "carried interest"

Edited by Jabbar
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I'm no financial wizard, so these are real questions....not me being difficult.

In a case like Mr. Biden, does he not pay income tax on the value of the stock he is awarded in the year he is awarded the stock?

Then, any time that stock is liquidated he would pay capital gains on the earnings at the time?

So in your example, if you were to close this loophole, Mr. Biden would need to pay taxes on his stock earnings every year? However, this would eliminate the current capital gains tax as all that tax would have been included in income tax?

On the surface the above seems ok. To the average investors 401k I think it would be devastating. What if I'm working a poorly paying job but I've made wise investments. Those investments do well and earn a good deal of money, but I am still saving. At the end of the year the government wants tax on these earnings but it's not like I have any more cash in my bank account, I would need to go sale a portion of my stocks in order to generate the money to pay the taxes for what I earned on them. Now, my position in that stock is weakened, I have less money to work towards earning money the next year, and the company who's been providing me solid growth in value sees their shares sold off through no fault of their own at tax season. 

Furthermore, let's assume I'm CEO of a new startup. We've recently gone public and through my sweat, blood and tears we are growing quickly. In order to encourage that growth, I've decided no to take a salary and instead my entire compensation is based in my 51% share of my company. Through my own ingenuity and expert leadership, my company has an amazing year and our stock value doubles. I was never wealthy before so I don't have enough money to pay taxes on the earning from my company stock so I'm forced to sale off a position of my assets in order to pay taxes. I lose the controlling 51% share of my company and my dreams of ownership are squashed.

 

Is the above all an inaccurate assumption of how something like this would work? Again, I'm not a financial guru and I'm working with a limited understanding of how these things work.

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(edited)

Neoliberalism: Neoliberals on both the right and left sure know how to carry/look after their own interests first. They claim to disdain government control but they will use it in order to gain every single advantage possible and will break it down bit by bit as they gain many concessions from it until all that is left is the security branch only just to make sure that things are not reversed back by anyone opposed to their changes.  This is happening in many countries already.

Edited by canadas canadas

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(edited)

On 12/6/2019 at 11:13 AM, PE Scott said:

I'm no financial wizard, so these are real questions....not me being difficult.

In a case like Mr. Biden, does he not pay income tax on the value of the stock he is awarded in the year he is awarded the stock?

Hunter Biden started a Hedge fund called Rosemont.  He goes to China with daddy and gets China Bank to give $1.5 billion to Rosount to manage.  As a partner in the firm he would get paid off the management fees .  The management fees get paid by transferring a percentage of a clients gains (shares)  to Hunter.  Say Hunter earns and gets $1 million transferred to his name. He pays no income tax.  He earns a return compounded each year until he with draws some . .  . . even at that it's a lower capital gains tax , not income tax rate.

If the Congressman Levin bill passed Hunter would pay income tax on the $1 million the year he received it , like most Americans do. 

Quote

Then, any time that stock is liquidated he would pay capital gains on the earnings at the time?

So in your example, if you were to close this loophole, Mr. Biden would need to pay taxes on his stock earnings every year? However, this would eliminate the current capital gains tax as all that tax would have been included in income tax?

Don't confuse individual investments with Hedge fund managers, Private Equity Managers or Investment Bankers. 

The 1% get this loophole, not the average American. 

Quote

s the above all an inaccurate assumption of how something like this would work? Again, I'm not a financial guru and I'm working with a limited understanding of how these things work.

"Carried Interest" has nothing to do with individual investing, employee stock awards, or startup stock.

This has everything to do with money managers taking their earned income as part of the return they made for their client thus not classifying it as income (when it is).  .  .  .  And not paying any income tax.  That money stays in fund and grows compounded yearly at full value Never Paying Income Tax.  

Edited by Jabbar
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I guess I'm missing how they avoid income tax in the first year or when they receive the shares. Not your fault, something I need to look into.

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(edited)

6 hours ago, PE Scott said:

I guess I'm missing how they avoid income tax in the first year or when they receive the shares. Not your fault, something I need to look into.

Google  "carried intetest"

Most don't understand . That's why Democrats secretly support it for Wallstreet contribution to campaign.

The voters don't realize the HUGE give away.

Edited by Jabbar
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57 minutes ago, Jabbar said:

Google  "carried intetest"

Most font understand . That's why Democrats secretly support it for Wallstreet contribution to campaign.

The voters don't realize the give away.

I had no idea. Thanks for bringing this up and explaining it. 

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(edited)

1 hour ago, ronwagn said:

I had no idea. Thanks for bringing this up and explaining it. 

In Canada for the working individual, such tax deferrals are found in government approved tax free savings accounts and registered retirement savings plans in which tax is paid upon withdrawal.  However, there are limits to how much money can be deposited in each and it does not look like millions of dollars can. 

Edited by canadas canadas

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16 hours ago, Jabbar said:

If nominated candidate does not support continuing "carried interest" no money from Wallstreet  for Dems.

No money = No win.

" Carried Interest" is the tax loophole that allows Hedge funds , Private Equity Firms and Investment Bank employees defer paying income taxes indefinitely. 

 

So after the Democrats bailed out Wall Street under Obama, is this how they are now repaying them?

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2 hours ago, PE Scott said:

I guess I'm missing how they avoid income tax in the first year or when they receive the shares. Not your fault, something I need to look into.

Carried interest primer

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(edited)

5 hours ago, ronwagn said:

I had no idea. Thanks for bringing this up and explaining it. 

Senator Schumer New York beat up Romney during election on his carried intetest loophole while he was previous employee at Bain Capital.

The afterwards Schemer became the highest recipient of Hedge Fund donations when he had to get reelected.  

He caved.

Hillary, took ton of money from Wallstreet.  Goldman threw her huge party at Waldorf honoring her just before she announced she was running.

At Goldman Sachs they have a proprietary fund for firm.  They put money in each year.  

As a Goldman employee you are given a stipend of maybe a couple of hun Fred thousand dollars . At year end you might get a bonus of say $2 million paid as shares from the proprietary fund as "carried intetest" . YOU PAY INCOME TAX ON THE $200,OOO BUT NO Income TAX ON THE $2 MILLION THAT'S TREATED AS CARRIED INTEREST.

CARRIED INTEREST" LOOPHOLE IS THE ONLY THING HEDGEFUNDS, PRIVAYE EQUITY OR INVESTMENT BANKS CARE ABOUT. 

 Clintons son in law works at hedge fund. Hunter Biden and Senator Kerry's stepson started a hedge fund, Paul Ryan's brother started a Hedgefund .  

I don't care if a Hedgefund manager makes $10 million a year . . . JUST PAY YOUR INCOME TAX LIKE EVERYONE ELSE 

Edited by Jabbar
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On 12/7/2019 at 1:29 AM, canadas canadas said:

So after the Democrats bailed out Wall Street under Obama, is this how they are now repaying them?

Bailout is separate but worse.

1. The federal reserve lent financial firms billions at no interest rate.

2. They allowed them to leverage it at 10x 

3. They than took the money and bought Treasury notes.  

4 Than sold the Treasury notes to back to the Federal Reserves that just lent them the money to buy the bills at treasury, at a profit.  Pays off Fed loan walks away with profit.

It's a racket

Example;

Firm a borrows $10 billion from Fed.  Firm leverage 10X to buy $100 billion Treasury notes at par.  Then sells them to fed at 102 (who gave them loan).

The firm A just made $2 billion profit sitting at their computer terminal. and is back in business.  They should have just written a check.  But that would have looked unfair. You could only advantage this scam if Fed approved. 

The carried intetest is different.  In exchange for allowing Wallstreet employees to avoid personal income tax they will finance your campaign.  A Goldman Sachs employee that writes a (1) personal check for the maximum allowed to the "chosen" candidate  (2) another check for $10,000 to DNC.  Pocket change compared to paying no income tax. 

At Goldman you are told by your manager "we are having a fund raiser for Hillary Campaign at 2:00 in conference room 202. Don't forget to bring your checkbook" .  You are expected to pay maximum personal contribution allowed and also nice check to DNC. 

 

Edited by Jabbar
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(edited)

4 hours ago, Ward Smith said:

This is terrible example.

Not used to share in profits. 

1. Clients pay you in shares. 

2. In case of a Goldman they put money in a proprietary fund and pay you with shares instead of a paycheck each month.  

Carried Intetest is indefensible when explained correctly.  AND THE HEDGEFUNDS KNOW IT.  

Ask Congressman Levin what happened to his bill.

Edited by Jabbar

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3 hours ago, Jabbar said:

This is terrible example.

Not used to share in profits. 

1. Clients pay you in shares. 

2. In case of a Goldman they put money in a proprietary fund and pay you with shares instead of a paycheck each month.  

Carried Intetest is indefensible when explained correctly.  AND THE HEDGEFUNDS KNOW IT.  

Ask Congressman Levin what happened to his bill.

The fact that it takes a lot of money to run a successful political campaign makes sure that only those that have and can raise a lot of money can make it into government which does produce a conflict of interest when those bankrolling someone for office will want a quid pro quo.

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17 minutes ago, canadas canadas said:

The fact that it takes a lot of money to run a successful political campaign makes sure that only those that have and can raise a lot of money can make it into government which does produce a conflict of interest when those bankrolling someone for office will want a quid pro quo.

Pols sell their soul for campaign finds.

Notice how Obama blasted Wallstreet yet a majority of the Wallstreet money went to Obama. 

Wallstreet says, ,"call me whatever names you want" .  .  " Just don't touch my Carried Interest" 

Edited by Jabbar

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2 minutes ago, Jabbar said:

Pols sell their soul for campaign finds.

Notice how Obama blasted Wallstreet yet a majority of the Wallstreet money went to Obama. 

Wallstreet says, ,"call me whatever names you want" .  .  " Just don't touch my Carried Interest" 

Corporations have now received the status of a rich individual person.  Will they be getting a voting right next as well?

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On 12/7/2019 at 1:49 AM, Ward Smith said:

2 tiered intent.  Similar rules, different game: you lose, while those entrenched in power remain entrenched in power, and win.

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6 hours ago, Tom Kirkman said:

2 tiered intent.  Similar rules, different game: you lose, while those entrenched in power remain entrenched in power, and win.

At first I wondered if you'd placed this in the wrong thread. Then I read this at the end

Quote

It’s this weird mish-mosh world where changing your party registration before you defraud your investors rob the bank might just help you out if you get caught.

 

 

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On 12/6/2019 at 11:03 PM, PE Scott said:

I guess I'm missing how they avoid income tax in the first year or when they receive the shares. Not your fault, something I need to look into.

The distributed shares are collateral, and the smart guy pledges the shares to his banker for a loan.  He can spend the loan money on himself.  The interest he gets charged is a tax deduction from his payroll check, so he ends up with a deduction from gross income to a lower net income.  See, you can spend a ton of money on yourself, to buy nice yachts and beach houses and hookers, as long as it is borrowed money, then you get all the fringe benefits of spending it and you get a nice tax deduction also. 

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On 12/7/2019 at 1:27 AM, canadas canadas said:

In Canada for the working individual, such tax deferrals are found in government approved tax free savings accounts and registered retirement savings plans in which tax is paid upon withdrawal.  However, there are limits to how much money can be deposited in each and it does not look like millions of dollars can. 

The Canadian tax flows can be traced back to 1962 and the Royal Commission on Taxation.  Kenneth LeMesurier Carter famously stated there: “A buck is a buck is a buck”

The idea was that taxes should reflect that the recipient gets to spend "the buck" (a dollar, to your foreigners) which is the same to him no matter its source.  Thus capital gains would be taxed the same as ordinary income - anathema to Wall Street, but an interesting concept inside Canada.  All this came about when Prime Minister John Diefenbaker and his Conservative government appointed Carter – who started his accounting career in Montreal with McDonald Currie, a predecessor of PwC – to lead a royal commission to study taxation and recommend reforms.  This set in motion the evolution of the Canadian tax system you have today. 

In the USA, the tax system was corrupted by the Democrats, on the municipal  (see Chicago), State  (see New Jersey) and Federal level, always invariably by Democrats.  I am disappointed to say that the destruction of the US taxation system has been done by Democrats in conjunction with the pigs of Wall Street.  Corruption?  Oh, yes, quite endemic.   

Wall Street is the parasitic plague on American society.  Goldman Sachs is the absolute worst player there, although the others work extra hard and on weekends to catch up with the looting of Mr. Average American.  And they have been remarkably successful. 

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2 hours ago, Jan van Eck said:

The distributed shares are collateral, and the smart guy pledges the shares to his banker for a loan.  He can spend the loan money on himself.  The interest he gets charged is a tax deduction from his payroll check, so he ends up with a deduction from gross income to a lower net income.  See, you can spend a ton of money on yourself, to buy nice yachts and beach houses and hookers, as long as it is borrowed money, then you get all the fringe benefits of spending it and you get a nice tax deduction also. 

This only works if you're a democrat. As Manafort proved having a scarlet letter R on your chest means Do Not Pass Go, Do Not Collect $200

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On 12/6/2019 at 10:29 PM, canadas canadas said:

So after the Democrats bailed out Wall Street under Obama, is this how they are now repaying them?

There were complaints at the time about the SAME Wall Street criminals who had just driven the entire economy into ruin cashing out massive bonuses from the Taxpayer funded "bailout". They pinkie promised to return every penny, cross their little evil hearts and hope to die. We're still waiting…

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45 minutes ago, Ward Smith said:

There were complaints at the time about the SAME Wall Street criminals who had just driven the entire economy into ruin cashing out massive bonuses from the Taxpayer funded "bailout". They pinkie promised to return every penny, cross their little evil hearts and hope to die. We're still waiting…

The bonuses seems to have amounted to at least $38 billion. 

None has been repaid to the Treasury  (not surprising). 

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11 minutes ago, Jan van Eck said:

The bonuses seems to have amounted to at least $38 billion. 

None has been repaid to the Treasury  (not surprising). 

Not to worry, I for one am still holding my breath ;)

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New upcoming trend is Anti-Neoliberalism and Anti-Neoliberal.

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