According to
Robert Reich, "Last year, America’s top thirteen hedge-fund managers earned an average of $1 billion each. One of them took home $5 billion."
Heavens to Murgatroyd! What in the name of Zeus does a single man or woman
do to deserve an annual salary of a billion dollars? Where does the money
come from to pay a billion-dollar salary?
According to
Wikipedia, "[H]edge funds are open only to a limited range of professional or wealthy investors... and are exempt from many of the regulations that govern ordinary investment funds." Hmmm... then the work of a hedge fund manager is
to help the rich become even richer.
Most hedge fund managers are compensated on a "2 and 20" basis, that is, they receive 2% of each investment "up front"–plus 20% of the profits. So a manager who earned $1 billion increased the wealth of his or her investors by $5 billion (of which he took $1 billion). And where did this $5 billion come from? Presumably from other investors who lost an equal amount of money in this zero-sum game.
So, do hedge funds contribute to the economy? Do they produce a product, provide a service, create jobs or stimulate the economy? Nope. A hedge fund is just a huge crap game played by the super rich. Winnings are taxed at the "capital gains" rate of just 15%, which is a "wash" as far as the IRS is concerned since the losers are able to declare an equal amount in "capital losses" on their tax returns.
And
you thought the rich invested their money in banks, which provide capital for entrepreneurs to fund businesses that create jobs for workers. Isn't that how "trickle down economics" is supposed to work? Isn't that the reason the Republicans don't want to burden the rich with high taxes? The hard truth is that supply-side economics
does not work because the rich would rather play "hedge fund games" with their money and invest it off-shore where they get better interest rates than paid by the banks in the U.S.
The solution? Return to a
progressive income tax.
Robert Reich has proposed a tax system as follows:
$15 million and up would be taxed 70%
$5 million to $15 million would be taxed 60%
$1/2 million to $5 million would be taxed 50%
Taxes on earnings less than $500K would be cut. [NB: We're talking individual earned income,
not corporate & business taxes.]
So, if you managed a hedge fund and earned $1,000,000,000, and couldn't find any loopholes in the tax laws, you'd still take home $300,000,000. Even at the lower end of the highest tax bracket, with a salary of a
mere $15,000,000, you would still take home $6,255,000. Shouldn't that be enough?
Enough is enough!
Most of us think of tax as a "four-letter word," but it is a necessary evil. A progressive tax is the only way to control the greed of the super-rich and bootstrap our economy out of the Great Recession. Think Robin Hood! We simply must take from the rich–especially the super-rich–
not to give to the poor, but to provide the middle and lower classes with a decent living–with jobs, education, and health care.
It only seems fair that those who are sucking the cream off the top of the economy should pay more in taxes than those of us left with skimmed milk in our trough.
P.S. Watch
"Real Time with Bill Mahr," the Feb 18th episode.
~ ~ ~
, and have noted more than thirty species and sub-species on and above my property. Most are common wildfowl–finches, sparrows, doves, and quail. I have also spotted less common fowl: a pair of great horned owls, a blue grosbeak, and a male lazuli bunting. The female lazuli was probably with him, but she looks so much like a common sparrow I overlooked her. But then isn't that the point of the female having less gaudy plumage? 
