Jeb Bush wants you to think he’d raise taxes on hedge fund managers. He’d actually cut them.
Jeb Bush wants you to think hed raise taxes on hedge fund managers. Hed actually cut them.
by Matthew Yglesias at Vox
http://www.vox.com/2015/9/21/9365061/jeb-bush-hedge-fund-tax
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The basic story is that hedge fund managers derive income through two different channels. Bush would raise taxes on one of those channels, but cut taxes on the other. Whether you benefit on net depends on the balance of the two channels in your particular income. And most hedgies come out ahead under Bush.
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So Bush, by closing the carried interest loophole, would raise taxes on profit sharing but cut taxes on the management fee.
That said, he's not talking about raising taxes on the profit share all the way up to the current top rate of 39.6 percent because he'd be cutting the top rate down to 28 percent.
By the same token, he'd also be slashing the tax rate paid on the management fee from the current top marginal rate of 39.6 percent down to 28 percent.
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