In Targeting Carried Interest, Republicans Sadly Only See The Success
The post In Targeting Carried Interest, Republicans Sadly Only See The Success appeared on BitcoinEthereumNews.com. NEW YORK, NEW YORK – SEPTEMBER 18: (EXCLUSIVE COVERAGE)Blackstone CEO Stephen Schwarzman as he … More visits “Maria Bartiromo’s Wall Street” at Fox Business Network Studios on September 18, 2019 in New York City. (Photo by Roy Rochlin/Getty Images) Getty Images It’s easy to forget that Blackstone Group co-founder Stephen Schwarzman didn’t start out as a private equity investor. Private equity is what he and co-founder Pete Peterson (1926-2018) migrated to after successful investment banking careers. In private equity, they saw that “you could really improve the companies you bought.” What brought Schwarzman and Peterson to private equity rates serious thought as President Trump encourages House Republicans to raise taxes on carried interest. The higher taxes would penalize performance, which means they would in effect raise the cost of going into the proverbial burning building to save it. That’s what private equity investors not infrequently do when they put investor capital to work. See again why Schwarzman got into private equity in the first place. As opposed to raising a fund for him and Peterson to invest in blue chip corporations, they would find the businesses in trouble, the ones on fire in a figurative sense, and that the typical investor had given up on. They would improve businesses that were at times at death’s door, and they would be compensated for reviving businesses not expected to make it. Which is a long way of saying that carried interest is the opposite of income exactly because carried interest is so hard to attain in the first place. Translated, “carried interest” is much more than a performance-based fee, it’s a performance-based fee that rewards private equity managers for doing the dirty work of investing, of fixing what appears unfixable to most. It’s what is paid out to the manager of a…
The post In Targeting Carried Interest, Republicans Sadly Only See The Success appeared on BitcoinEthereumNews.com.
NEW YORK, NEW YORK – SEPTEMBER 18: (EXCLUSIVE COVERAGE)Blackstone CEO Stephen Schwarzman as he … More visits “Maria Bartiromo’s Wall Street” at Fox Business Network Studios on September 18, 2019 in New York City. (Photo by Roy Rochlin/Getty Images) Getty Images It’s easy to forget that Blackstone Group co-founder Stephen Schwarzman didn’t start out as a private equity investor. Private equity is what he and co-founder Pete Peterson (1926-2018) migrated to after successful investment banking careers. In private equity, they saw that “you could really improve the companies you bought.” What brought Schwarzman and Peterson to private equity rates serious thought as President Trump encourages House Republicans to raise taxes on carried interest. The higher taxes would penalize performance, which means they would in effect raise the cost of going into the proverbial burning building to save it. That’s what private equity investors not infrequently do when they put investor capital to work. See again why Schwarzman got into private equity in the first place. As opposed to raising a fund for him and Peterson to invest in blue chip corporations, they would find the businesses in trouble, the ones on fire in a figurative sense, and that the typical investor had given up on. They would improve businesses that were at times at death’s door, and they would be compensated for reviving businesses not expected to make it. Which is a long way of saying that carried interest is the opposite of income exactly because carried interest is so hard to attain in the first place. Translated, “carried interest” is much more than a performance-based fee, it’s a performance-based fee that rewards private equity managers for doing the dirty work of investing, of fixing what appears unfixable to most. It’s what is paid out to the manager of a…
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