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Originally Posted by scottw
not only is it not just "current code"...but apparently not all that unusal....nor are the simplistic attempts to feign unfairness  |
The existing tax code is a jumble of provisions lobbied for by business interests trying to influence legislators so the super rich can stay super rich. I think we'd both agree that a lot of what's presently "legal" isn't necessarily right.
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United Kingdom
In 1987, the Inland Revenue and the British Venture Capital Association (BVCA[3]) entered into an agreement which provided that in most circumstances gains on carried interest were not taxed as income.
The Finance Act 2003 widened the circumstances in which investment gains were treated as employment-related and therefore taxed as income. In 2003 the Inland Revenue and the BVCA entered into a new agreement which had the effect that, notwithstanding the new legislation, most carried-interest gains continued to be taxed as capital gains and not as income.[4] Such capital gains were generally taxed at 10% as opposed to a 40% rate on income.
In 2007, the favourable tax rates on carried interest attracted political controversy.[5] It was said that cleaners paid tax at a higher rate than the private-equity executives whose offices they cleaned.[6] The outcome was that the capital-gains tax rules were reformed, increasing the rate on gains to 18%, but carried interest continued to be taxed as gains and not as income.[7]
sound familiar?...you'd think those enlightened Brits would have stomped out such unfairness and declared "all income" to be "income"...regardless
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You're ignoring your own cut and paste...The UK decided instead to nearly double their capital gains rate on EVERYBODY.
All a carried interest correction would do is ensure that partners pay a similar tax rate for their labor as other investment advisers already do for basically the same job. If anything, it's a more simple and consistent tax code.
But, I guess if I had a golden goose I'd want to protect it as well.
-spence