- Microsoft's Bill Gates Praises Apple's Steve Jobs For 'Saving the Company'
- Gold Is a Bad Inflation Hedge—Like Oil: Stock Picker
- Intel's Andy Bryant Offers An Explanation
- US 'Actively Working' on Weaker Dollar: Fund Manager
- Options Boil on Biotech Buyout Rumors
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Activision Blizzard's "Modern Warfare 2" Sales Break Records
- 5-Star Manager's 5 Stocks for Changing Markets
- What's The Forecast from Retailers? Proceed With Caution
- Job Market Politics to Keep Interest Rates Low
- AIG, Symbol of Crisis, Watches Its Stock Zoom Back
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Bill Gates Praises Apple's Jobs for 'Saving the Company'
- Cities With the Most Home Price Reductions
- Cramer: The Real Reason Stocks Fell Thursday
- Is Euphoric Market Ignoring Warning Signs?
- Video Game Sales Plunge, but Have They Hit Bottom?
- Despite Rhetoric, Obama Has Few Options to Boost Jobs
MOST SHARED
- Warren Buffett and Bill Gates Share Their 'Optimism' With Eager Columbia Business Students
- Cities With the Most Home Price Reductions
- Disney Profit, Sales Top Street Forecasts; Shares Jump
- Warren Buffett's $100,000 Offer and $500,000 Advice for Columbia Business School Students
- Meet The Leaders of the New Retail Revolution
- Disney CFO and Parks Chief to Swap Roles
- Despite Rhetoric, Obama Has Limited Options To Boost Jobs
- Is Euphoric Market Ignoring Warning Signs?
- Housing Recovery 'Still In Uncharted Territory': HUD Secretary
Text Size 
 |
Blackstone Co-Founder Stephen Schwarzman |
Now there's a bi-partisan move in Congress to strip away tax benefits from Blackstone, and other private equity firms like it, when they go public. The prospect of being taxed as a partnership rather than a corporation is one of the factors contributing to Blackstone's big payday.
Of course, it's hard to feel too sorry for the super-rich, and that's exactly what makes them an inviting political target. Recently, as the Wall Street Journal's David Wessel reports, even supporters of globalization, a massive wealth-generator overall, argue that a growing income gap is politically aiding and abetting protectionists and threatening future free trade reforms.
| The Heat asks: Should Washington target the super-rich? |
 |
News: Blackstone Says Tax Changes Will Hurt Value (June 15)
News: Blackstone CEO's High Profile Concerns Rival Firms (June 15)
CNBC.com Web-Only Video: Reporter's Notebook discussion on the Blackstone controversy with Managing Editor Tyler Mathisen and Senior Economics Correspondent Steve Liesman (June 15)
Kudlow & Company Video: Kudlow on Taxing Private Equity (June 15)
Closing Bell Video: Targeting Private Equity (Part 1) and Targeting Provate Equity (Part 2) (June 15)
Power Lunch Video: PE Taxes with Eamon Javers, BusinessWeek Washington Correspondent and CNBC's Melissa Lee, John Harwood and Bill Griffeth (June 15)
Morning Call Video Discussion: Bullseye on Blackstone with Andrew Ross Sorkin of the New York Times, Breaking Views U.S. Editor Rob Cox and CNBC's Michelle Caruso-Cabrera (June 15)
Morning Call Video Debate: Washington vs Wall Street with Wharton professor Thomas Donaldson and Stephen Moore of the Wall Street Journal's Editorial Board (June 15)
Squawk Box Video: Taking Aim at Private Equity reported by CNBC's Melissa Lee (June 15)
Squawk Box Interview: Where Are the IPOs? with CNBC's Becky Quick and Private Equity Week editor-at-large Dan Primack (June 15)
On the Money Video: Blackstone in the Crosshairs with Andrew Ross Sorkin of the New York Times and CNBC's Melissa Francis (June 14)
News: Proposed Legislation Could Double Blackstone Tax Burden (June 14)
News: CNBC's Gasparino - Several Private Equity IPOs Likely After Blackstone (June 11)
Play-By-Play: AFL-CIO Wants Blackstone to Register as Investment Company (June 14)
 |
Financial Times: Blackstone faces IPO challenge in Senate (June 15)
New York Times: Bill Would Raise Taxes on Public Equity Firms (June 15)
The Hill: Legislation tackles partnership tax loophole (June 15)
Committee on Finance: Baucus-Grassley Bill Addresses Publicly Traded Partnerships (June 14) and Text of Legislation Regarding Publicly Traded Partnerships (June 14)
Wall Street Journal (subscription required): How Blackstone's Chief Became $7 Billion Man (June 13)
ABC News: How Much Is Too Much? (June 13)
 |
Melissa Lee's Power & Money Blog: Steve Schwarzman - Too Rich or Not for Congress? (June 15)
The Daily Reckoning: Blackstone IPO - Founders Count Billions as Retail Investors Get Pinched (June 13)
FT.com: Blackstone's Riches (June 11)
Dan Primack on peHUB: The Blackstone Bill (June 15)
 |
| The Heat has a strong faith in the free market. It bristles when it hears anyone say someone else is "too rich" or being paid "too much." As long as a wealthy person didn't get rich by breaking the law, there should be no such thing as having "too" much money. |
| But there's a difference between what should be and what is. Now Wall Street is making even the Heat think twice. As that classic of Economics 101, the Ultimatum Game, demonstrates, if the winners get "too" far ahead of the losers, those losers will stop playing, even if they would be better off staying in the game. |
| The deep human belief that things should be "fair" is strong and can't be ignored. Politics can't be ignored. Washington does need to step in and save Wall Street from its own excesses by narrowing (but, of course, not eliminating) the gap between the super-rich and the rest of us. If it doesn't, everyone could suffer as protectionists and anti-capitalists are unduly strengthened by a populist backlash against those with "too much" money. |
Should Washington target the super-rich?
Questions? Comments?
Should Washington target the super-rich?
Email us at:
"Easy solution: tax all income, whether dividend, capital gain, wage, or other, at the same rates we have now. I'm not saying a flat tax. For those who say that will lead to fewer jobs from raising the capital gains and dividend tax rate, ever hear about a stock price or dividend going up when layoffs are announced?" - Lee, Ohio
"Remember, these firms do not have to go public. There are enough private investors (such as myself) to invest. And they can go oversees with the filing of one document to almost completely leave the U.S. tax system. If we do, say goodbye to about $12.4 billion in tax money gone to another country's treasury." - Walt
"Why tax any individual? The Federal Reserve just creates money out of thin air anyway. Just print it or make the appropriate digital entries. Individual taxes don't even cover the interest on the national debt and raising rates won't do a damn bit of good." - Jon
"Washington already taxes the super-rich. It's the dummies in Washington and at the state and local levels who have imposed the highest corporate tax burden among all the industrialized nations. So Blackstone will actually help us become more competitive by reducing costs... Become more competitive, compete with imports, reduce balance of payments. Isn't this what we want? - Andrew, New Hampshire
"Listening to someone say that the rich are getting out of taxes, regardless of how obscene the amount is, does not understand that capitalism rewards the hard working, intelligent and the lucky. To blatantly describe how rich someone should be puts severe limits on the today's economy." - Jack, Virginia
"I believe it's difficult for the majority of us to understand why a head of household who brings home the bacon needs several million dollars per year to provide for a family. The rest of us get by on so little and what we have we have worked hard for. Why would a family need their own boat and three or four homes? It makes no sense to the so-called middle class. The viewer who referred to 'obscene wealth' had it right on the money! Look what you can buy with money to burn: a daughter like Paris Hilton. " - Suzanne, North Carolina
"How dare someone be too successful? So Schwartzman's making obscene money, why should he be penalized? He's not sitting on the money, he's out spending the money in the economy, and others realize those profits. Congress's idea of taxing anyone who's successful is absurd .. Blackstone should just tell Congress 'up yours' and take their IPO to the London exchange." - Carl, California
READ MORE EMAIL RESPONSES TO THE HEAT
- Warren Buffett and Bill Gates spoke to Columbia students, and Buffett made the students a startling offer.
- They may have wrecked their companies or saved our economy. Tell us what you think.
- Big pharma embraces social media, but how much should a tightly regulated sector say on Facebook or Twitter?
- A European dating site finds lovelorn singles from one country to be consistently uglier. Which is it?
- Contributor David Pogue looks at two of the latest efforts to perfect the digital pocket camera.
- PepsiCo is ramping up its onsite health facilities for workers.
Data is a real-time snapshot *Data is delayed at least 15 minutes