The Super-Rich Pay a Little Tax Now
The super-wealthy hedge fund managers will now pay a very small amount of income taxes, ranging from a total of $25 billion to $100 billion, quite a spread of uncertainty, due to the implementation of legislation enacted by Congress during the 2008 economic crisis. f course, our esteemed federal legislators gave these folks 10 years’ delay in implementation, providing lots of time for these wealthy individuals to figure out how to avoid as much as possible the bite out of their wallets.
In an article recently published by the Wall Street Journal,[1] this tax avoidance resulted directly from the federal tax authorities allowing hedge fund managers to defer income taxes on their gains so long as they organized their funds offshore, with Cayman Islands being the preferred jurisdiction. They essentially paid no income taxes on billions of dollars of income (no one really knows how much, which is the reason for the huge spread in anticipated taxes) for decades, just rolling it over into more and more investments. This bloated their already bloated US earnings, launching them into a stratosphere of wealth that most people on this planet cannot even imagine.
These folks, with the advantages that accompany great wealth, special access to the people who make and enforce the financial laws and regulations, and great investment opportunities, have also gamed the tax collector to keep ever more of their earnings. As Warren Buffett has been fond of saying, even his secretary pays a higher percentage of his or her income than he.
Just look at the tip of the iceberg for a hint of what financial wealth has been accumulated by this group of individuals. Paintings that are traded in the hundred-million-dollar range, multiple multi-multi million dollar homes and vacation retreats, hundred-million- dollar yachts, private jets sweeping them to anywhere they want to go on the planet, at any time they choose, million dollar cars, and more. A great number of these people have not just one, but ALL of these trappings of wealth at the same time.
They complain that society is strangling the wealthy by asking them to pay more taxes. But the real story is, they don’t pay any taxes in a real sense. Their tax rate is a token contribution to the rest of the people who do the real work. This statement may seem like Communist or Socialist jargon, but, it happens to be true.
It’s time for an annual asset tax in the range of 5%, levied on all financial assets held by people with a net worth over a certain amount, say, $25,000,000. This percentage is what is required of charities to disburse in order to maintain their status to take in tax-deductible donations. It should be applied as well to the super-wealthy, as the cost of the privilege of reaping huge amounts of money from their financial manipulations and ability to concentrate wealth into their hands.
[1] https://www.wsj.com/articles/loophole-closed-hedge-fund-managers-prepare-huge-tax-checks-1500543002
