Did you know that hedge fund managers pay a lower income-tax rate than you? Hedge fund managers only pay 15% income tax. How?
When you take a draw of your partnership profits, it's treated as income. If you, like many readers, are successful, then you're paying 35% income tax on your profits.
When a hedge fund manager takes a draw from profits, his income is treated as long-term capital gains - 15%.
This is a loophole that has existed for years. Every year there's an editorial about it. Here is the New York Time's latest. Every year the loophole remains.
If your representative cannot even make obvious changes on small things involving Wall Street, how can you trust them on the large things? If Congress will not close a loophole that benefits a few - and that everyone realizes is unfair - why would Congress regulate Wall Street on larger issues?
Norm Pattis, an agnostic, has long been fond of Biblical parables. Perhaps we theists and atheists alike should read the Parable of the Talents:
For it will be like a man going on a journey, who called his servants and entrusted to them his property. To one he gave five talents, to another two, to another one, to each according to his ability.
Then he went away.
He who had received the five talents went at once and traded with them, and he made five talents more. So also he who had the two talents made two talents more.
But he who had received the one talent went and dug in the ground and hid his master’s money.
He who had received the one talent came forward, saying, 'Master, I went and hid your talent in the ground. Here you have what is yours.' But his master answered him, 'You wicked and slothful servant! You knew that I reap where I have not sown and gather where I scattered no seed?
Then you ought to have invested my money with the bankers, and at my coming I should have received what was my own with interest. So take the talent from him and give it to him who has the ten talents. For to everyone who has will more be given, and he will have an abundance. But from the one who has not, even what he has will be taken away. And cast the worthless servant into the outer darkness. In that place there will be weeping and gnashing of teeth.'
Those of you wiser than I are shaking your heads: "Foolish Mike doesn't realize that the politicians in Washington have served their masters well. Mike just doesn't realize who the real masters are." Unfortunately I realize that all too well. Do you?