Unsurprisingly, the Republican tax plan moving forward in the U.S. Congress and championed by Donald “Drain the Swamp” Trump, is very swampy. Today’s post will highlight a few examples.
First, let’s hear some of what billionaire fund manager Jeffrey Gundlach had to say. Via Bloomberg:
Jeffrey Gundlach, chief investment officer of DoubleLine Capital, said the congressional tax plan would expand the federal deficit and help a small fraction of the U.S. population, including hedge fund managers.
“I’m very disappointed incidentally about the shape of this tax cut that is being proposed,” Gundlach told a gathering of industry participants at the Drake Hotel in Chicago on Wednesday. “I am just appalled that we are going to continue to have a carried-interest scheme for hedge funds.”
The House bill set to be voted on Thursday keeps the carried-interest tax treatment that benefits private-equity managers, venture capitalists, hedge-fund managers and certain real estate investors. During last year’s campaign, President Donald Trump had vowed to get rid of the loophole. White House top economic adviser Gary Cohn has said Trump is committed to ending the tax break.
“After I saw that tax bill, I lost hope with the drain the swamp concept,” Gundlach said. “The swamp keeps getting bigger.”
Carried interest is the portion of a fund’s profit — usually a 20 percent share — that’s paid to managers. Currently, tax authorities treat that income as capital gains, making it eligible for a rate as low as 20 percent. The top tax rate for ordinary income is 39.6 percent.
He called the tax plan “a cosmetic tax decrease for the middle class that will go away over time.”
Of course, none of this is really surprising. Donald Trump’s been a Wall Street bootlicker ever since he came into office, just like Barack Obama before him.
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