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Carried Interest Loophole: Is Anyone Still Defending It (for Free)?
Posted By Frank Pasquale On February 26, 2013 @ 7:53 am In Tax | 1 Comment
The New York Times ran an excellent opinion piece  yesterday on the bizarre carried interest loophole, tailor-made to nearly halve the tax rate for a tiny sliver of financiers:
Millions of general partners in investment funds receive carried-interest income when they earn profits for their clients. Since these partners do not have to risk any of their own capital, carried interest is really a taxpayer-subsidized fee for managing their clients’ money . . . . No other affluent Americans enjoy this benefit. A brain surgeon, stockbroker, corporate lawyer or actor will have to pay the new top marginal rate percent, while a general partner who manages other people’s money pays, on carried-interest income, only the 20 percent rate on long-term capital gains. . . . The difference in revenue to the United States government when this combined income is taxed at 20 percent rather than at 39.6 percent is about $11 billion annually.
I imagine there are plenty of think tanks  happy to characterize this discrepancy as a reflection of (their donors’) wisdom and free enterprise at work. I vaguely recall some academics defending it years ago. But is anyone still doing so, given that we now know how lavishly the finance sector is subsidized , and how tax policy exacerbates inequality  in so many other ways?
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URL to article: http://www.concurringopinions.com/archives/2013/02/carried-interest-loophole-is-anyone-still-defending-it-for-free.html
URLs in this post:
 excellent opinion piece: http://www.nytimes.com/2013/02/25/opinion/carried-interest-an-unjust-privilege-for-financiers.html
 think tanks: http://blogs.lse.ac.uk/lsereviewofbooks/2013/01/31/book-review-think-tanks-in-america-thomas-medvetz/
 lavishly the finance sector is subsidized: http://press.princeton.edu/titles/9929.html
 exacerbates inequality: http://taxprof.typepad.com/files/138tn1007.pdf
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