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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsGary Cohn's last laugh: Cashing out on trumps tax plan
The one corner of Wall Street thats partying like its 1999private-equity firms and hedge fundsis the very group that Cohn will likely look to join when he returns to New York. After all, in the circles that Cohn travels, a $250 million fortune is merely the table stakes necessary to catapult into the land of the billionaires.
Gary Cohn, the chief economic adviser to Donald Trump, was adamant on Wednesday that he is remaining in his job after accomplishing the once-in-a-lifetime opportunity to reform the U.S. tax code. Im staying, he insisted during an Axios event in Washington, D.C. But privately, friends of Cohns believe les jeux sont faits: after several failed attempts to resign his post, Cohn could leave around the State of the Union address in late January, according to a source familiar with his thinking. Cohn, after all, has finally achieved his purpose after a long, scandal-ridden year in the West Wing: overseeing the first major reform of the tax code since 1986. Cutting taxes was, Cohn told me last summer, the chief reason he stuck by Trumps side, lending his name to levels of executive ineptitude he would never have tolerated at Goldman Sachs. Mission accomplished, as one popular Trump critic tweeted, facetiously, about Cohn. Time to go back to the private financial sector and count da $. Precisely right.
Why would Cohn, a lifelong Democrat, be taking a victory lap to boast about a tax plan that adds some $1.5 trillion to the national debt and hugely favors big corporations and the super-richwho, like Trump, make most of their money from capital gains and partnership interestsat the expense of the middle class to which he once belonged? Indeed, the new tax plan does little for the vast majority of families, who will soon be asked to foot the bill with cuts to Medicare and Social Security. It also puts the wood to the merely rich, such as Cohns old Wall Street banking buddies, who get large salaries and bonuses and live in high-tax states such as New York, Connecticut, and California. They will continue to pay tax at the highest marginal ratereduced under the plan to 37 percent from 39.6 percentbut will no longer be able to deduct more than $10,000 of their state and local taxes from their taxable income. This will hurt them badly. And it would have hurt Cohn, too, when he was at Goldman Sachs. But that was before he went to Washington and converted his $250 million Goldman fortune into Treasury securities, tax-deferred. (The timing of Cohns expected departurea little more than a year after he startedis probably tied to his desire not to lose the tax deferral benefit.)
Not to be overly cynical here, but the one corner of Wall Street that is partying like its 1999 as a result of Trumps tax planprivate-equity firms and hedge fundsis the very group that Cohn will look to join when he returns to his family in New York. In other words, as Gary Cohn returns to the private sector, he will benefit enormously from the tax plan he shepherded through Congress. Quelle surprise.
My bet is that many existing private-equity firms or hedge funds would love to have Cohn as their new partner, despite the stink of Trump that surrounds him. (And not withstanding his laughable comment to Axios this week that the White House just couldnt figure out a way to repeal the carried interest provision in the tax code, no matter how many times they tried.) He was already uber connected in corporate America and among Wall Street financiers; now, he is uber connected in Washington and in politics generally. As one of the tax bills main architects, he is also uber knowledgeable about legislation that got slapped together largely behind closed doors, right up until the last minute, and that few either inside or outside Washington fully understand. At Goldman, Cohn was a trader and then an executive. He also fancied himself a rainmaker, hanging out with Silicon Valley executives while trying to lure them into Goldmans web of clients. But now, after a year as the national economic adviser, he truly is a rainmaker, and will look to cash out, bigly. After all, in the circles that Cohn travels, a $250 million fortune is merely the table stakes necessary to catapult oneself into the land of the billionaires.
Why would Cohn, a lifelong Democrat, be taking a victory lap to boast about a tax plan that adds some $1.5 trillion to the national debt and hugely favors big corporations and the super-richwho, like Trump, make most of their money from capital gains and partnership interestsat the expense of the middle class to which he once belonged? Indeed, the new tax plan does little for the vast majority of families, who will soon be asked to foot the bill with cuts to Medicare and Social Security. It also puts the wood to the merely rich, such as Cohns old Wall Street banking buddies, who get large salaries and bonuses and live in high-tax states such as New York, Connecticut, and California. They will continue to pay tax at the highest marginal ratereduced under the plan to 37 percent from 39.6 percentbut will no longer be able to deduct more than $10,000 of their state and local taxes from their taxable income. This will hurt them badly. And it would have hurt Cohn, too, when he was at Goldman Sachs. But that was before he went to Washington and converted his $250 million Goldman fortune into Treasury securities, tax-deferred. (The timing of Cohns expected departurea little more than a year after he startedis probably tied to his desire not to lose the tax deferral benefit.)
Not to be overly cynical here, but the one corner of Wall Street that is partying like its 1999 as a result of Trumps tax planprivate-equity firms and hedge fundsis the very group that Cohn will look to join when he returns to his family in New York. In other words, as Gary Cohn returns to the private sector, he will benefit enormously from the tax plan he shepherded through Congress. Quelle surprise.
My bet is that many existing private-equity firms or hedge funds would love to have Cohn as their new partner, despite the stink of Trump that surrounds him. (And not withstanding his laughable comment to Axios this week that the White House just couldnt figure out a way to repeal the carried interest provision in the tax code, no matter how many times they tried.) He was already uber connected in corporate America and among Wall Street financiers; now, he is uber connected in Washington and in politics generally. As one of the tax bills main architects, he is also uber knowledgeable about legislation that got slapped together largely behind closed doors, right up until the last minute, and that few either inside or outside Washington fully understand. At Goldman, Cohn was a trader and then an executive. He also fancied himself a rainmaker, hanging out with Silicon Valley executives while trying to lure them into Goldmans web of clients. But now, after a year as the national economic adviser, he truly is a rainmaker, and will look to cash out, bigly. After all, in the circles that Cohn travels, a $250 million fortune is merely the table stakes necessary to catapult oneself into the land of the billionaires.
https://www.vanityfair.com/news/2017/12/gary-cohn-last-laugh-cashing-out-on-trump-tax-plan
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