taxing the money you earn by providing a service well hedge fund managers are providing a service and their compensation is in the form of a percentage of the profits that their services help generate there is no reason that that should not be taxed as ordinary income now again i don't want anything taxed as ordinary income if we're up to me there would be no income tax but to the extent that we have an income tax it makes sense to me that it be fair that it be even i don't think the government should reward certain types of occupations rather than others because by taxing carried interest at capital gains instead of ordinary income the government is telling you that it is more lucrative to be a hedge fund manager than to basically practice any other occupation because let's say you have two entrepreneurs one guy decides to start a hedge fund and another guy maybe he wants to open up some hotels so one guy operates hotels the other guy manages a hedge fund and let's say both of these guys do really well and they make NUMBER_TOKEN million dollars after their expenses not NUMBER_TOKEN million gross but NUMBER_TOKEN million net because you always have to compare what people make after they pay all their expenses because some people could operate in a business with much higher overhead than other people so let's look at the bottom line taxable income so the guy that's operating the hotel chain he makes NUMBER_TOKEN million dollars and the guy that is running a hedge fund he makes NUMBER_TOKEN million dollars why should the guy operating the hedge fund have a maximum rate of NUMBER_TOKEN on his NUMBER_TOKEN million but the guy who's running hotels he has to pay NUMBER_TOKEN or NUMBER_TOKEN whatever it is when you add up all the stuff there is no reason for the government to do that to reward certain occupations over others the government should not be micromanaging the economy because the government is steering people towards those occupations because if you're a very bright ambitious guy and you want to maximize your after-tax income the government is telling you be a hedge fund manager don't get involved in some other industry that maybe would be more productive than running a hedge fund but if you run a hedge fund because of the preferential tax treatment you're gonna make more money it skews the playing field so we get a less than optimal outcome because probably a lot of the people who choose the hedge fund industry but for that carried interest preferential treatment maybe they would be doing something else that would actually benefit society more than running a hedge fund but it doesn't happen because of government but the question is why does it happen because there's not that many middle class people who are running hedge funds right the democrats they all want to talk about how they want to get the rich right they want to soak the rich it's not fair the risks are exploiting the tax code they're not paying their fair share so why are all these democrats the democrats control the house the democrats control the senate why couldn't they put into this bill an elimination of this preference and say you know what the millionaires and the billionaires who manage these hedge funds it's about time they started paying the same tax rate as everybody else as all the other successful entrepreneurs from all different occupations they're all paying ordinary income taxes on what they earn we got to stop letting the billionaires pay a lower tax on what they earn why didn't they do it the reason is because they're a bunch of hypocrites that's why the reason is you've got
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