The Voice of the People

Here are just a few recent news items that struck me ... as showing a pattern of the 1% solidly backing Hellary Clinton for president.

- Hedge fund managers give $48.5 million to Clinton's campaign, $19 thousand to Trump's ... see: Wall Street Journal Article.

- Michael Bloomberg speaks at Clinton convention, calls Trump a "dangerous demagogue" ... see: CNN Video.

- Billionaire Mark Cuban endorses Clinton, calls Trump a "jagoff" at Pittsburgh rally ... see: Washington Post Article.

- Warren Buffett at a recent Clinton fundraiser, "A monkey would have generated better returns than you [Trump]" ... see: CNBC Article.

Are we beginning to see a pattern here? The super-wealthy elites in America are clearly hoping that Hellary Clinton wins in November and continues the policies of Obummer ... and they are backing these desires with lots of money and rhetoric that is often as purple as Trump's. Why we wonder?

Perhaps because they have done quite well, thank you, during the crony capitalism, fire-hose government spending, open-borders to cheap labor, and [un]free-trade policies of the current administration and they are worried that Trump will throw sand on the tracks of their gravy train?

These 1%ers have suffered through the Occupy Wall Street protests ... they dodged a bullet when Bernie Sanders came up short in his bid for the Democrat nomination ... they have invested heavily in the Clinton brand of back scratching through generous speaking fees and "charitable donations" to the Clinton Foundation ... and they want and expect a generous return on this investment.

Has Hellary pledged to eliminate the carried interest generous tax treatment for hedge fund managers? No ... but Trump has. Even though Hellary has vowed to increase taxes for the wealthy, we all know that, without a fundamental overhaul of the tax law, the super wealthy using existing loopholes will still, like Warren Buffett, pay a smaller percentage of their income than their secretaries. Has Hellary pledged to reform the tax system? I haven't heard her say so. have you?

Perhaps, with all of this grease, Hellary will prevail and defeat the populist Trump in November ... but she will at her and the Washington elite's peril (and I include many Republicans, like Paul Ryan, in this mix). For the American people are beginning to understand the game that is being played in DC ... and there is a revolt brewing. Those in the 1% would be smarter in the long run if they listened to the voice of the people.

Afterward: Even the Koch brothers are implicated ... see: Breitbart Story.

Clipping Hedge Funds

I criticize President Obama quite a lot.  So when I get a chance to agree with him, I feel to be out of step with myself.  However, his calling for hedge fund managers to pay taxes on their compensation ... as though it were ordinary income ... strikes me as quite rational (see: Huffington Post Story).  The reason that these barons of Wall Street ... such as Warren Buffet ... currently get away with paying 20% (just upped from 15%) on their hedge-fund compensation (which often can runs into the tens, if not hundreds of million dollars) is that it is treated as "carried interest" ... in other words, it is viewed for tax purposes by the IRS as though it were real interest on invested capital.  It most often isn't.  The definition of "carried interest" is:

"A share of any profits that the general partners of private equity and hedge funds receive as compensation, despite not contributing any initial funds. This method of compensation seeks to motivate the general partner (fund manager) to work toward improving the fund's performance."

Rush Limbaugh has also  zeroed in on "carried interest" as possibly being a problem. This could be because the recent raising of the taxes on capital gains from 15% to 20% may have been inspired by this tax loophole  That is, the rest of the country is now paying a penalty for this one taxing inconsistency.  Rush had in the past implied that this compensation represents a fair (interest) return on what these managers initially invested.  It most often isn't.  Or, if it is, is is not allocated according to what percentage their initial investment represents relative to the total hedge fund assets.  This, to me, is wrong ... and needs to be remedied.  The closing of this tax loophole is not going to balance the federal budget (bringing in just a few extra billion dollars), but this unfairness seems to be gnawing at Obama’s (and my) psyche … and should be fixed.   Then maybe we can drop the real capital gains tax rate back to 15%?  That would be fair.

So even though Obama seems to be biting the hand (Wall Street) that has fed him royally, I will support him on this one issue.  But I won't make it a habit.

Pass This Jobs Bill Now!

President Obama (The Barry) has proposed new taxes to pay for his proposed $447 billion "jobs" program (see: The NY Times Agrees).  I suspect this tax proposal is as much to play politics as it is to pay for his dog's breakfast of "new" jobs proposals.  That is ... The Barry knows that the Republicans will not go along with any tax increases now and therefore he can call them out during next year's campaign and blame them for what surely will be high unemployment rates then.  In other words, it is a bald-faced set up to try to keep his job rather than grow new jobs for the rest of Americans.

However, surprisingly, I agree with a few of the bullet points in this new taxes proposal ... independent of whether his jobs proposals will or will not help the economy ... and so I will list these points as outlined by the NY Times editorial and indicate my feelings about each:

1) Capping the value of itemized deductions and other tax breaks at 28% (of adjusted gross income?).  I AGREE  This, in effect would be an extension of the alternative minimum tax in the current tax code ... a step that I have already proposed (see: Taxing Ideas).

2) Ending tax breaks for oil and gas companies.  I DISAGREE  If we are going to become energy indipendent then we cannot punish the very companies that would make this happen.  I have opined on this in more detail in the past (see: Oily Decision).

3) Not letting hedge-fund managers pay taxes on most earnings at the capital gains rate.  I AGREE  This has been an egregious loophole through which the wealthest on Wall Street have avoided paying their fair share of our government's cost.

4) Curbing tax breaks for corporate jets.  I DISAGREE  This is pure two-faced silliness by a man who flies, at taxpayer expense, in the most expensive flotilla of jets of any other American entity.  Is he bound and determined to kill the private-jet building business?  Even Warren Buffet has disagreed with this proposal.

5) Ending the lower tax rates installed by George W. Bush.  I DISAGREE  If The Barry's proposal to cap tax deductions (see #1 above) comes about, then there will be no need to scrap the Bush tax cuts as I strongly suspect that government receipts will grow anyway.

The Democrats, as of this hour, have not yet filed The Barry's "pass this jobs bill now." bill.  What's up?

Is this just political theater afterall?