Hedgies pay less taxes than you ?

T

trade2live

I understand the taxation of carried interest in the US is only 15% which applies not just to the gains made by a manager on his own capital but on his share of the fund investors' profits (although strictly speaking this is a fee and thus no different than other professional income).

On the other hand the individual trader in the US is paying cap gain tax at the income rate ! What kind of twisted system is that ? Is it just because you don't have any friends in Washington ?
 
Quote from trade2live:

I understand the taxation of carried interest in the US is only 15% which applies not just to the gains made by a manager on his own capital but on his share of the fund investors' profits (although strictly speaking this is a fee and thus no different than other professional income).

On the other hand the individual trader in the US is paying cap gain tax at the income rate ! What kind of twisted system is that ? Is it just because you don't have any friends in Washington ?
More...

Just trade futures and other Section 1256 contracts and get 60 long/ 40 short tax treatment.

Or start your own hedge fund.
 
Quote from trade2live:

I understand the taxation of carried interest in the US is only 15% which applies not just to the gains made by a manager on his own capital but on his share of the fund investors' profits (although strictly speaking this is a fee and thus no different than other professional income).

On the other hand the individual trader in the US is paying cap gain tax at the income rate ! What kind of twisted system is that ? Is it just because you don't have any friends in Washington ?
More...
You're completely wrong.

Carried interest just means the hedge fund management company fees are taxed based on the characteristic of the underlying income. So, if a hedge fund is doing intra-day day-trading like the individual trader you're comparing them to... the management company will still be taxed "income tax" rates. There's no difference between a hedge fund manager and individual trader.

On the other hand, if an individual trader holds an investment more than 12 months, they're taxed at the 15% rate. If carried interest was repealed, fees going to hedge fund asset managers would be taxed as income regardless of how long they had held the investment.
 
buffet pays only 15 % tax while his assistant pays 30 to 35 %.

i say increase tax on every stock, longer term or short term to 40%.

dividend 40%. risky assets 40 to 50 %.

take money from wall street and give tax breaks to small and mid size employers..
 
combining the corp tax on profits of about 40% with a 40% individual tax rate, the government will be taking 64% of dividend earnings. Who needs socialism?
 
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