As you probably know, many wealthy people who enter politics place their financial assets into blind trusts that are managed by a third party who has the authority to buy and sell assets on behalf on the trust owner, but without informing the owner of these transactions. The theory is that if politician A, let's say the Secretary of the Treasury, doesn't know that he owns shares of General Motors that he will be free to make decisions that might affect GM either for the good or for ill, without having to consider what is in his best interest ahead of what is in the country's best interest.I just learned that to compensate the trust holder for relinquishing control over his finances, he is exempt from paying capital gains taxes on sales made from the trust. Some are estimating that this exemption might provide a tax savings of up to $200 million for Hank Paulson during his tenure as Treasury Secretary. Nice perk, and it certainly makes "public service" more attractive.
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12 comments:
The way we Americans tax ourselves is just plain stupid.
You wrote once for the elimination of corporate taxes and NO ONE agreed with you, except me. That essay was written longer ago than your archives.
I am not surprized or shocked by the taxation rules for Mr. Paulson. They are what they are.
There is a different view out there and it's called "The Fair Tax".
Insted of looking for loop holes - which the Paulson is - let's look to a better way of taxing ourselves.
I like "The Fair Tax".
And were surprised?
your point? to echo birdman no surprise there.
I guess it's not a stretch to suppose this little perk might have had an influence on Paulson’s decision to take the Treasury job -- given the chance to unwind his stake in Goldman Sachs tax-free.
We can thank Bush 41 for this public office extra.
It truly is them against us and we’ll never win.
I'm looking into the limits of the 2nd Amendment. I want to add a clause that allows everyone two free murders. No X wives please.
Gaga -- if your amendment passes you'll have 5 ex-wives fighting to use one of their two on you. i don't like your odds.
As for the free pass on capital gains, i have to confess that i was surprised. just call me Pollyanna.
D -- Pollyanna is indeed the first word that comes to mind when your name comes up. Your boyish naivte is so refreshing.
Hush Birdman -- you'll give me the vapors.
See the 6/21/08 post for the argument against corporate income taxes.
Besides, our gift of the great tax code that keeps goverment growing and coming back for more; what about the coin that public officials are paid? Criminal... I always laugh when they(both parties) spout about the sacrifice of public service. Then to make the deal a litlle sweeter, add the retirement and hospitalization perks.Generous Motors has nothing on the Federal Goverment. The blind trust must always workout or it wouldn't be.Why does the goverment tax money it gives folks for unemployment?
The reason that "blind trusts" are favored by our politicians is that they are not really blind. They are pretend blind trusts, designed to give the politicians cover while they influence the trustee or public policy in their favor financially. There are many instances of our elected officials tampering with these trusts. We only hear about it when they step way out of bounds and then they are usually exonerated (see Bill Frist).
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