Senate Democrats are proposing legislation titled, The American Jobs and Closing Tax Loopholes Act. The bill will, among other things, extend unemployment benefits and COBRA extensions. They're trying to schedule for a vote next week before the recess. And, to ward off the usual GOP criticism, this time, they've even come up with a way to pay for part of it: Removing a special tax loophole available to money managers. And, it's a big loophole that allows some of the richest people on Wall Street to pay the lowest tax rate.
From various sources, I pieced together how this tax structure works. Money managers at entities likes hedge fund, private equity firms and hedge funds don't get weekly paychecks. They're paid through a system known as "carried interest." Their income, which is essentially based on a share of the profits of the fund, is taxed at a far lower rate than income tax (15% vs. the top marginal income rate of 35%). So, what does it mean.
No comments:
Post a Comment