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Bobbing as the Taxman Weaves

• tptacek 16y ago
  Key grafs: Capital gains have long been taxed at a lower rate than ordinary income because investors risk their own money when they make their bets. Under their current partnership structure, however, general partners — like executives at Kohlberg Kravis Roberts or TPG — receive 20 percent of any profits and they have been treating that as a capital gain even though their own money is not at risk. A lot of people, including me, have been arguing for years that their cut of the winnings is really income, not capital gains. (Of course, profits that executives make by investing their own money in the deals should be considered capital gains.)
  • deleted 16y ago
    [deleted]
• splat 16y ago
  This seems like a lot of fuss over a negligible amount of money going to the government. Who knows how many man-hours of highly-skilled labor are going to be wasted trying to get around these new tax laws? And what does the government get out of this? "$25 billion over the next decade." That's ~0.07% of the US Federal budget per year. That doesn't even come close to the amount that the Office of Budget and Management acknowledges as being "improper payments" (i.e. fraud, waste, or abuse) of $98 billion.
  • tptacek 16y ago
    (a) You can make the same claim about a lot of specific cases in the tax code, many of which you would not then imply we should just blow off. (b) You argue that the money is not worth the many man-hours of labor needed to recover it, but provide no evidence for that. What's the threshold gain (over enforcement expenses) the government should get to justify imposing or enforcing a tax? (c) You note OMB's fraud number, but don't acknowledge that two wrongs don't make a right, and that the number is therefore not directly relevant to the discussion.
• noonespecial 16y ago
  The merry little god of unintended consequences is getting ready to once again laugh his ass off.