[FoRK] Short version was Re: Limeys can't comprehend US tax law? ;
<jbone at place.org> on
Thu Apr 24 16:29:30 PDT 2008
Partnership income stemming from investment doesn't magically all
convert to long term capital gains simply by flowing through the
partnership. Those who are making such an issue about this are either
arguing from principle that *no* flow-through income should be taxed
at less than the ordinary income rate, or they simply don't understand
the breakdown between longer-term and shorter-term trading in most of
these shops. And for those that are outraged, they're completely
missing the point that beyond a surprisingly-low threshold of such
income with a typical mix of tenors, the blended tax rate
asymptotically approaches the max and the portion taxed at the lowest
rate approaches epsilon. And this is, remarkably, BY DESIGN; this
feature of the tax code, among other things, is intended to discourage
short-term speculation! Amazing!
Buffett is an aberration on *many* dimensions, I don't really think
his situation should be the model for tax policy decisions.
Now per se venture capitalists, that's a completely different story.
I'm all for taxing them until their eyeballs bleed and they cry for
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