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March 5, 2014

Here's How 9 Kingpins Made $2.6 Billion Last Year — And Got Subsidized By Taxpayers

“Private-equity kingpins made billions last year subsidized by you, the taxpayer.”

“The nine highest-paid private-equity executives in the U.S. hauled in more than $2.6 billion in 2013, The Wall Street Journal’s Ryan Dezember reported on Tuesday, citing regulatory filings by their firms. That’s not a misprint: Just nine human beings split a $2.6 billion jackpot last year.”

“Salaries made up only a tiny sliver of this pay, according to the Journal. Most of the income consisted of dividends and profits on investments their firms made. That included hundreds of millions of dollars of what is called ‘carried interest’ — a slice of a firm’s investment returns that is regularly paid to hedge-fund and private-equity managers and taxed at the capital-gains rate of just 15 percent, instead of being taxed like regular income.”

“The Journal did not break down how much money, in total, these men made in carried interest, aside from offering just a couple of examples: Henry Kravis and George Roberts of the firm KKR each made $43.3 million in carried interest, or about a quarter of their total haul.”

“But the overall numbers involved here are huge: Closing the carried-interest loophole could raise $21 billion for the federal government over 10 years, according to one estimate by the tax-reform advocacy group Citizens for Tax Justice.”

“This loophole is one big reason why a tiny sliver of the very wealthy has pulled away from even other members of the 1 percent.”

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Read full Huffington Post article here.

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