Professor Bainbridge...on law, politics, religion, culture & food

Hillary on Hedge Funds

In her sudden financial conversion to financial populism, Hillary Clinton takes a dig at hedge funds and Wall Street:

We also have to reward work more, and by that, I mean, I have people in New York working on Wall Street as investment managers, as hedge fund executives. Under the tax code, they can pay a lower percentage of their income in taxes on $50 million than a teacher or a nurse or a truck driver in Parma pays on $50,000. That’s very discouraging to people.

She plans to fix the tax code so that hedge fund managers pay more taxes:

In Wisconsin on Monday, Mrs. Clinton sounded a similar criticism of hedge funds. A Clinton presidency would restore a “fair tax system” that eliminated loopholes for “hedge fund dealers.”

Previously, Mrs. Clinton — like many of her rivals past and present, including Barack Obama and John Edwards — has supported raising the tax rate on carried interest, the bulk of private earnings that is currently taxed at the 15 percent capital gains rate.

Many have noted the irony that Chelsea Clinton works for a hedge fund.

More significantly, Hillary Clinton has been the top recipeient of campaign contributions from people in the hedge fund industry, pulling in $1,330,942. She’s also the top recipient of campaign contributions from people in the finance sector generally, pulling in $16,059,487.

There’s a famous quote, “An honest politician is one who, when he is bought, will stay bought,” which is attributed to Simon Cameron, who coincidentally was both a financier and politician.

So forgive me if I doubt the sincerity of Hillary’s hedge fund tax promises.