From Rush Limbaugh’s show yesterday:
“Asset wealth is that group of people who are already rich, already wealthy, and do not need income to stay wealthy. They are not seeing any tax increase to speak of. Five percent increase in capital gains, but that is it. In fact, several of the asset wealthy got carve-outs in this fiscal cliff deal.
The asset wealthy, Democrat donors, Democrat bundlers, Hollywood types, hedge fund types, Wall Street types, the very people that Obama is ginning up hatred for, are the very people exempted. And in their place are the income rich that people are being encouraged to resent, encouraged to hate. Obama is encouraging people to feel good when these rich people get stuck with higher taxes, except the real truly rich people in this country aren’t being stuck with higher taxes, the asset wealthy. I mentioned it in the first half hour, the carried interest loophole.
This is such an outrageous loophole that if you could get beneficiaries of it to be honest, they would tell you it’s unfair. They would tell you they can’t believe they’re getting away with it. Let’s say a young entrepreneur, say in Silicon Valley, starts up a big firm, and it goes gangbusters. He sells it for hundreds of millions of dollars. He has now become asset wealthy. He’s not income wealthy; he’s asset wealthy.
What does he do with this money?
Well, he invests it here and he invests it there. Maybe he starts a hedge fund, or maybe he starts a fund that will ask other people for their money that he will invest. So he takes other people’s money, he invests it, and if that money shows a gain… It’s a very complicated thing. Basically to understand carried interest, just think of it as income on assets that’s taxed at the capital gains rate instead of the income tax rate.
That’s who the asset wealthy are, and carried interest was not touched. And the reason carried interest wasn’t touched is because of who it is that benefits from it. By the way, I’m not on a warpath here against these people. I don’t resent anybody. I want that to be understood. I don’t want to use government to get even with anybody except people who break the law. I don’t want government getting involved with anything like this.”
Also see: “The Big Fiscal Cliff Deal Winners: Hedge Fund And Private Equity Moguls” – from Forbes.
