The top 25 hedge fund earners took in $22.07 billion in 2010. Thanks to a generous tax loophole these billionaires will pay a top tax rate of 15 percent instead of 35 percent. Closing that loophole on just those 25 individuals – just 25 guys who wouldn’t miss a penny of it — would raise $4.4 billion, which is enough to rehire 126,000 laid-off teachers.
Wait a sec. This is America, not Russia. Don’t we want our entrepreneurs to go out there and earn as much as possible? We don’t want to punish the successful who are building up our economy, do we?
Maybe that’s a strong argument when you’re talking about the CEO billionaires of Apple and Google and other successful companies that make products we use. But when it comes to financial billionaires, we don’t even know what they do for a living.
Each and every day I ask people and I get a blank stare or something like: “They invest. They make money.” Sure enough, but how do they make so much money? Where does it come from? How can hedge fund firms with fewer than 100 employees make as much profit as companies like Apple with tens of thousands of employees?
This much we know. They speculate. The place bets. They jump in and out of markets at lightening speeds. They have secret betting formulas just like card counters in Vegas. And as any state attorney general can tell you, a good number of them cheat by betting with illegal insider tips, front-running trades, sneaking in trades after markets close and so on. The entire industry is barely regulated as it plays with a bankroll of $2.2 trillion that comes mostly from enormously rich investors. You can bet the next crisis will bubble out of this vast and murky casino.
I have yet to hear a convincing argument that financial billionaires produce economic value commensurate to what they earn. And if they don’t, that means they are siphoning off the wealth from the rest of our nation. Either we do something about it or we’ll watch our standard of living crumble.