February 1, 2012
Carried Interest: The Scam of All Scams
Matt O'Brien, The New Republic
[Guest post by Matt O'Brien]
I’m not sure this qualifies as a quiet room, but let’s talk about inequality anyway. More specifically, let’s discuss the taxes that some of the super-rich pay. The much-anticipated release of Mitt Romney’s tax returns confirmed what was widely assumed: He pays less of his income in taxes—13.9 percent to be exact—than do many middle-class households. Romney manages this sweetheart rate thanks to the so-called carried interest loophole that rather absurdly lets him classify the vast majority of his income as capital gains—which are taxed far lower than ordinary income. It’s an outrage. And one that is demonstrably without any justification.
First, a quick primer on how carried interest works....
TAGGED: Private Equity, Matt O'Brien