Clinton/Obama/Edwards back increase in taxes on managers of private equity/hedge funds

[papau]

http://www.bloomberg.com/apps/news?pid=20601070&sid=aZ.WSs35i0.0&refer=politics (paraphrased and edited down to a minimum size)

Clinton is backing efforts to boost taxes for managers of private-equity firms and hedge funds, saying that profits that managers receive for investment services should be taxed as ordinary income and not as capital-gains (Ordinary income is taxed at rates as high as 35 percent and the capital gains rate is as low as 15 percent). Cinton did not say what specific pieces of legislation she is backing.

Edwards (supporting a measure backed by such Democrats as House Ways and Means Committee Chairman Charles Rangel of New York) also favors taxing the investment managers' income, known as carried interest, at the higher rates.

Illinois Senator Obama say he will soon co-sponsor legislation introduced by Senate Finance Committee Chairman Max Baucus, a Montana Democrat, and the panel's ranking Republican, Charles Grassley of Iowa that will classify publicly traded hedge funds and private-equity funds, such as Blackstone Group LP, as corporations, subjecting them to higher taxes.


Meanwhile on the GOP side Rudy Giuliani has said he opposes raising the managers' taxes.

[Warren Stupidity]

1. Well there is a burning issue sure to motivate the base.

How about this headline instead:

"Clinton/Obama/Edwards back medicare for everyone, immediate withdrawal from Iraq, universal public education through university level, an end to the war on some drugs, a 10 year plan to reduce the size of our foreign military presence by 90%, and a national focus on reducing the US carbon footprint to 1990 levels in 10 years."

I'd actually get excited.

[papau]

3. I like your suggested headline- I hope we will see it soon! :-)

:-)

[antigop]

2. And what is Dodd's position on said tax increase? n/t

[papau]

4. Dodd appears great on the issues - but his website has nothing on this n/t

n/t

[antigop]

5. And are we surprised that he has nothing on this?

HINT: How many hedge fund managers live in Connecticut?

http://money.cnn.com/galleries/2007/pf/0703/gallery.high_income_zip_code_homes/3.html

>>
The adjusted gross income for Greenwich was a heady $567,560 in 2004, a figure that undoubtedly has spiked upward since. The town is a magnet for Wall Street investment bankers and New England hedge fund operators.
>>

[papau]

6. Perhaps no- but he's true blue pro union/civil right/progressive liberal-hard to fault him on issues

n/t

[antigop]

7. Disagree -- he was responsible for overriding Clinton's veto on PSLA

Private Securities Litigation Act.

Take a look at his top contributor.

http://opensecrets.org/politicians/indus.asp?CID=N00000581&cycle=2006

[papau]

9. I did not know that about PSLA - I was just reading the "issues" section of his website - but

the contributor list is just a reflect on the industries that feel they need access to him and his Banking Committee - not a big deal under our system where we refuse to see the money as a bribe - just free speech and an attempt to gain access,

Until Federal financing of federal elections it is hard to chase anyone for who contributes to them.

For instance, over half of Obama's contributions to date come from just 10,000 "wealthy" individuals with the bulk in the investment business - not said of course is that they just gave $2300 - called the "max" in write-ups. So is it the investment houses that own Obama? - I don't think so - and likewise with Dodd.

As to the Private Securities Litigation Reform Act of 1995 (PSLRA) which affected pleading, discovery, liability, class representation and awards fees and expenses, allowing judges to decide the most adequate plaintiff in class actions, mandating full disclosure to investors of proposed settlements, including the amount of attorneys' fees, baring bars bonus payments to favored plaintiffs, and permitting judges to scrutinize lawyer conflicts of interest - the point was to stop the IPO suits that resulted after a new issue stock price went down rather than up - people suing pretending the issuing underwriters knew of the future or had caused the decrease in price. On general principles, having lost money on IPOs, I was with the plaintiffs and the Clinton veto - but there is a case to be made for stopping frivolous suits.

[antigop]

13. Dodd teamed up with Phil Gramm -- that should tell you something, imo n/t

[papau]

15. True :-)

:-)

[antigop]

14. Private Securities Litigation Act and Enron

http://www.consumersunion.org/finance/securdc202.htm

>>
In light of the Enron debacle, consumer groups today urged Congress to amend a 1995 law that restricted investors' ability to sue for securities fraud and undermined the accountability of accountants, lawyers, and others associated with Enron.

Consumers Union and Consumer Federation of America believe that the Private Securities Litigation Reform Act (PSLRA) may have helped pave the way for the Enron disaster.

"This law weakened the threat of liability for securities fraud to the point that it may have contributed to the lack of oversight of Enron," said Sally Greenberg, Consumers Union's senior product safety counsel.

When Congress approved the PSLRA in 1995, President Clinton vetoed it, but lawmakers voted to override the veto. At the time consumer groups said that the law would make it much harder for individuals and pension funds to recover their financial losses from fraud

"Congress was warned that this law would help protect financial swindlers from being held accountable," said Travis Plunkett, legislative director of Consumer Federation of America. "It diminished the legal threat that helped keep auditors honest (Note: A CFA white paper on a plan to overhaul public audits is online at www.consumerfed.org/enron_auditor_rpt.pdf)."

>>

[papau]

17. Were forward looking statements an issue in Enron - or was it fraud - in any case

my senator and hero Ted Kennedy voted for it

I do not understand the legal loopholes opened and closed and therefore do not have an opinion of my own.

Meanwhile I need to search for who wants to terminate current trade treaties and redo as fair trade treaties (your post below has me wondering).

[antigop]

19. Here is a FRONTLINE piece that explains some more

http://www.pbs.org/wgbh/pages/frontline/shows/regulation/etc/script.html

>>
HEDRICK SMITH: Pressed by the high tech and accounting industries, the House and Senate passed the bill by large majorities. But President Clinton vetoed it, asserting that it would close the courthouse door on investors with legitimate claims. Some Senate Democrats rallied behind their president.

Sen. RICHARD BRYAN (D-NV): It's safe to say that crooks will be emboldened, investor confidence in our markets will go down, and defrauded investors will not be compensated.

HEDRICK SMITH: But what happened next stunned observers.

Sen. CHRISTOPHER DODD (D-CT): But I believe that the override is the proper course to follow here.

HEDRICK SMITH: Senator Chris Dodd of Connecticut, then head of the Democratic National Committee, led the effort to overturn Clinton's veto.

Sen. CHRISTOPHER DODD: It is with a deep sense of regret that I'm on the opposite side of my president on this issue.

CHARLES LEWIS, Center for Public Integrity: Chris Dodd, here he is, he's Chairman of the Democratic Party, but he's also the leading advocate in the U.S. Senate on behalf of the accounting industry. And he helps overturn the veto of his own president, who installed him as Democratic chairman. Chris Dodd might as well have been on the accounting industry's payroll. He couldn't have helped them any more than he did as a U.S. senator.

HEDRICK SMITH: By way of thanks, the accounting industry gave Senator Dodd nearly one quarter of a million dollars in political donations, even though, at the time, Dodd was not up for reelection.



RICHARD WALKER, SEC Enforcement Chief (1998-2001): The accountants were the big winners with the Litigation Reform Act. The law imposed a proportionate liability standard, which means that if the accountants only contribute to, say, 20 percent of the loss, then they would only be responsible for 20 percent of the amount that would have to be paid.
>>

[antigop]

8. He also voted for NAFTA

http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=103&session=1&vote=00395

[papau]

10. The theory of trade at the time was it produced more jobs as it hurt specific jobs - but

I believe all our candidates today realize the error (it helps to have Bender and Samulsen and Nobel prise in economics behind the idea of fair trade rather than free trade).

[antigop]

12. If you look at the vote tally I posted, lots of DEMS voted against it

They knew how bad it was. Dorgan tried to tell everyone how bad a deal it was.

Dodd should have known better.

Also, I have not seen Dodd demand a repeal of NAFTA. All it says on his website is that there should be protections in trade agreements. I don't see him demanding a repeal of the existing bad agreements.

[papau]

16. True again - DK I believe has called for repeal - anyone else? n/t

n/t

[antigop]

18. Here is some info -- a little bit old and may not be up-to-date

http://www.ontheissues.org/News_NAFTA.htm

[papau]

20. What a great site! :-) I did not know such a useful site existed - here's an update!

http://www.ontheissues.org/Hillary_Clinton.htm



Hillary Clinton on Free Trade
Click here for 12 full quotes on Free Trade OR other candidates on Free Trade OR background on Free Trade.

* End tax breaks for outsourcing jobs. (Jun 2007)
* Globalization should not substitute for humanization. (Jun 1999)
* Supports MFN for China, despite concerns over human rights. (Oct 2000)
Voting Record
* Voted against CAFTA despite Bill Clinton's pushing NAFTA. (Oct 2005)
* Voted YES on free trade agreement with Oman. (Jun 2006)
* Voted NO on implementing CAFTA for Central America free-trade. (Jul 2005)
* Voted YES on establishing free trade between US & Singapore. (Jul 2003)
* Voted YES on establishing free trade between the US and Chile. (Jul 2003)
* Voted NO on extending free trade to Andean nations. (May 2002)
* Voted YES on granting normal trade relations status to Vietnam. (Oct 2001)
* Voted YES on removing common goods from national security export rules. (Sep 2001)
* Rated 17% by CATO, indicating a pro-fair trade voting record. (Dec 2002)

* l 2004)

Barack Obama on Free Trade
Click here for 5 full quotes on Free Trade OR other candidates on Free Trade OR background on Free Trade.

* Reinvest in communities that are burdened by globalization. (Jun 2007)
* Insist on labor and human rights standards for China trade. (Jul 2004)
* Fair trade should have tangible benefits for US. (Jun 2004)
* Voted YES on free trade agreement with Oman. (Jun 2006)
* Voted NO on implementing CAFTA for Central America free-trade. (Jul 2005)

[Alamom]

11. k