RebelCapitalist: Financial Information for the Rest of Us | Financial Oligarchy Declares ‘Class War’

Financial Oligarchy Declares ‘Class War’

Aug 16, 2010 | By: Mr_Blue | Tags: class war, carried interest, oligarchy

When someone left of center on the political spectrum says something regarding economic inequality and socioeconomic class the defenders of the status quo (Repuglicans and oligarchy) will scream class warfare. This declaration by Repuglicans and oligarchy is a means to cover their own silent ‘class war’ that they have been conducting. But now the oligarchy has broken its silence and has made it pretty explicit.

Stephen A. Schwarzman, chairman and CEO of Blackstone Group and a member of the financial oligarchy, has broken the silence by comparing President Obama’s plan to raise the tax on “carried interest” to - in his own words:

“It’s like when Hitler invaded Poland in 1939.”

Get the Hitler reference - you know the same sort of crap that right wingnuts and teabaggers are saying about President Obama. Great messaging.

So what is “carried interest”? Well, its a form of compensation that private equity fund managers receive from its investors. Typically, private equity fund managers will receive a certain percentage of profits of an investment fund, say 15%, without having to contribute 15% of investment capital. Currently, this carried interest is treated and taxed as a capital gain. Capital gains have much lower tax rates - 15% - than ordinary income tax. Did I mention that is was a form of compensation - pay for services type of compensation? It’s a nice tax benefit for private equity fund mangers.

Financial oligarchy is fighting hard to keep its billions while the rest of us deal with deficit hysteria and cuts to public services and public education - stuff that matters to Working Class Americans. The oligarchy are pulling out all the stops. Besides comparing the increase in carried interest tax to Hitler’s invasion of Poland, they have called it a ‘job killer tax’. Oops, I guess I missed where private equity funds were creating so many jobs in the first place.

Private equity industry is really not providing a social or even much of an economic benefit to warrant such a tax break. If the financial oligarchy wants a ‘class war’ consider this - they have much more to lose than the rest of us. At some point the oppressed can’t be harmed anymore and when that happens look out.

BTW, the Democratic controlled congress recently killed a proposal to raise the carried interest tax but this proposal will probably be resurrected and it should be.

Suggest reading:

Compromise Provision to Narrow “Carried Interest” Tax Loophole Should Not Be Weakened Further

Good luck.