Tuesday, April 19, 2016

The Hard Political Truth about Carried Interest

Liberal Democrats have wailed for years about the ability of hedge funds and private equity partners to convert ordinary income into capital gains. They are the villains of the piece. However the use of carried interest is far broader than in canyons of Wall Street and the leafy suburb of Greenwich.

Two key Democratic constituencies also water at the trough of carried interest. They are the venture capitalists of Silicon Valley and the arts community of Hollywood/Broadway. How do you think start-ups get financed? Answer: Venture Capital Partnerships. The same goes for Broadway productions and more than a few movies.

So next time the issue comes up you should look to the money bags of Silicon Valley and Hollywood to ante up. We will see if the Democrats will gore their own oxen.

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