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Thursday, November 4, 2010

"It's like when Hitler invaded Poland"

So said Stephen Schwartzman, founder of The Blackstone Group, the largest private equity fund on Wall Street when the Obama administration suggested taking away the special tax loophole for Hedge Fund managers. Hedge fund managers are allowed to claim all their earnings as capital gains at 15% rather than pay 35% their tax bracket would normally pay.

Last year the top 25 hedge fund managers earned an average of $1 billion each. That break saves them an average of $200 million each per year. According to the GOP worldview, when people like these hedge fund managers pay less taxes they create jobs. I am sure it works for the hedge fund managers. They might need a couple more people to staff the new bigger yacht, a couple more gardeners and maids and maybe a few extra people in the office as well as deputy butler. Multiply that by 25 and a couple of hundred lucky souls might have jobs, all for a measly $5 billion tax break.

For that same measly $5 billion, about 50,000 teachers jobs nationwide can be saved at a time where cash strapped states are laying off teachers at a record pace.

American Crossroads and Crossroads GPS are two political organizations that took advantage of the Citizen's United ruling to spend $38 million on 12 Senate and 22 House races. These two organizations are headed by Karl Rove and Ed Gillespie, two old GOP hands. Those funds came almost exclusively from those same hedge fund managers who appear to feel about the same way Poland felt in 1939.

The GOP won 9 of the Senate and 14 of the House races thanks partly to that infusion of cash. Many of those votes came from Tea Party members who frequently expressed their anger at Wall Street. The candidates they voted for will now go to Washington and do exactly what they are told which is to preserve those tax breaks for billionaires at all costs while 50,000 more teachers lose their jobs.
At least the GOP will be true to their word. They did assure us, over and over, that they were going to create jobs.....assuming that those hard pressed hedge fund managers don't already have all the staff they need.

Note: $5 billion would be the added tax revenue from just the top 25 hedge fund manager's earnings.

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