Bill Is Offered to Increase Tax on Private Equity

How many of us wish that we could make millions and then only pay 15% on that money? That is the standard practice for partnerships, including private equity managers, venture capitalists and some hedge funds.

Fund managers usually get a cut of those profits — often 20 percent — and that cut, known as carried interest, is taxed as a capital gain, a 15 percent rate. In recent months, lawmakers and labor groups have been increasingly questioning whether these profits should be taxed at the 35 percent rate. A similar debate has been playing out in Britain, where a well-known buyout figure, Nicholas Ferguson, said this month that he and his cohorts “pay less tax than a cleaning lady.”

The cut of the profits that they are talking about is how the fund managers get paid. That to me is income not capital gains and should be taxed as such. The managers are of course screaming that this will limit private equity. That is total nonsense. Are we to believe that they would rather lose the millions in income rather than to pay a higher tax on it?

This has been a shell game for years with the wealthiest among us finding every way possible to not pay their fair share of taxes. This practice has finally come to light in the public conscience. The Democrats need to stand firm and make the necessary changes to the tax code. The nearly free ride for these people needs to end.

Big Oil Companies Spared Tax Hikes

Senate Republicans on Thursday blocked a $32 billion package of tax breaks for renewable energy that would have been financed mostly by new taxes on major oil companies.

Democrats came three votes short of overcoming a threatened GOP filibuster that was keeping the measure from being attached to a broader energy bill. Republican senators argued that the nearly $29 billion in additional taxes on major oil companies would have led to reduced production and higher gasoline prices.

Because of Republican opposition, Democrats needed 60 votes to allow the package to come up for a vote, but fell short, 57-36. With a number of senators not voting, Democrats could resurrect the measure later, though there was no immediate indication of that.

Now you can understand why the war will not stopped until the Democrats can get a 60 vote filibuster proof majority. This is just more of a giveaway to big oil at the expense of research into renewable energy. Do you still think the Republican party is working in the best interests of the American people.

Tax Abatements for the Rich

There is a new building going up in the Chelsea Section of Manhattan. Chelsea is one of Manhattan's best neighborhoods and is home to a large Gay population. This is not an up and coming neighborhood. It is an extremely desirable neighborhood and has seen prices climb to exorbitant levels. A recently investigated a new building being built called the Chelsea Stratus.

A one bedroom apartment which is around 900 sq.ft. has an asking price of over 1 million dollars. The property tax on your condo is less than $100.00 per month tax abated for 10 years. The actual monthly taxes on this condominium without tax abatement would be $2000.00. The loss in tax revenue for one year is over $4.5 million dollars and $45 million over the life of the tax abatement. I pay double in taxes on my co-operative apartment in Yonkers, NY which is a suburb of NYC. My apartment, although very nice, is nothing compared to the elegance of the Chelsea Stratus. Is there anyone else that has a real problem with this? I can understand tax abatement in areas needing gentrification but to abate taxes in one of the finest neighborhoods in Manhattan seems insane.

The reason for this post is to highlight the inequalities of our current tax system. The Bush tax cuts went to the highest earning Americans at the expense of our national budget and social programs to help the poor. How can we as a society sit back and allow these inequities? It is time for Americans to vote based on the economic class they find themselves in, not the economic class they hope to become.

Democrats Want Middle Class Tax Relief

The Alternative Minimum Tax is poised to effect millions of Middle Class Americans if Congress does not act. The tax was originally created to keep the rich from avoiding taxes but it could soon effect more of the middle class.

The alternative minimum tax, initially intended to ensure that the rich could not take so many deductions and credits that they paid no federal income taxes, will hit some 23 million taxpayers next spring when they file their 2007 income tax returns unless Congress takes action.

"This tax now affects schoolteachers, firefighters, police officers. It was never intended to be that way," said Rep. Rahm Emanuel, an Illinois Democrat who sits on the tax-writing Ways and Means Committee in the U.S. House of Representatives.

"Middle-class families making between $75,000 and $100,000 are now more likely this year to pay the tax than those making more than a million dollars," Emanuel said in the weekly Democratic radio address.

If the tax is repealed it would cost 50 Billion per year and those revenues would need to be made up in some fashion. Expect lots of disagreements as to how this lost revenue will be made up.