Discover and read the best of Twitter Threads about #carriedinterest
Most recents (4)
#Sopranos fans know the #BustOut as a mob tactic in which a business is taken over, loaded up with debt, and driven into the ground, wrecking the business's workers, customers and suppliers. When the mob does it, it's a bust out; when Wall Street does it, it's #PrivateEquity.
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If you'd like an essay-formatted version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
pluralistic.net/2023/06/02/plu…
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pluralistic.net/2023/06/02/plu…
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It used to be that we rarely heard about private equity, but then, as national chains and iconic companies started to vanish, this mysterious financial arrangement popped up with increasing frequency.
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Last June, @propublica announced that it was in possession of leaked IRS files detailing the tax affairs of America's richest people, and that #TheIRSFiles showed that taxes are - as Leona Helmsley famously quipped - for the little people:
pluralistic.net/2021/06/15/gui… 1/
pluralistic.net/2021/06/15/gui… 1/
If you'd like an unrolled version of this thread to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:
pluralistic.net/2022/04/13/tax… 2/
pluralistic.net/2022/04/13/tax… 2/
The initial reporting described how, for example, private equity raiders were able to debt-finance acquisitions of productive businesses, run them into the ground, pocket hundreds of millions of dollars, *and* avoid tax as they sprinted away from the wreckage. 3/
For at least a decade, US politicians have made symbolic, unfulfilled promises to do something about the "#CarriedInterest tax loophole," a thing that virtually no one understands. @yvessmith's explanation will remedy that.
nakedcapitalism.com/2021/04/privat…
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nakedcapitalism.com/2021/04/privat…
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To understand carried interest, you have to start with capital gains tax. In the US, wages - money you get for working - are taxed at a higher rate than capital gains (money you get because you sold something you own at a profit).
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Supposedly, that's because capital gains are critical to pension savings. That's important given the annihilation of employer-backed pensions and the rise of "market-based" pensions dependent on working stiffs figuring out how to win at the stock-market casino.
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"In a 2011 Times Op-Ed, Warren #Buffett decried the treatment of #carriedinterest, which allowed him to report a lower tax rate than his secretary. A minimum tax on millionaires was proposed shortly thereafter & dubbed the '#BuffettRule.'”
nytimes.com/2021/04/23/bus… #PrivateEquity
nytimes.com/2021/04/23/bus… #PrivateEquity
1. "The #carriedinterestloophole might finally disappear. Profits earned from funds owned by real estate investors & mgrs of #privateequity & #venturecapital firms are taxed as #capitalgains at about 20%, instead of as regular income, which is taxed at more than double that rate"
2. "#Privateequity executives are also worried that the Biden administration may limit the tax deductibility of corporate interest payments, which would be another hit to their business model."
