Top 25 Hedge Fund Managers Make As Much As 440,000 Middle-Class Americans, But Still Get Tax LoopholeSubmitted by mac_hine on Thu, 04/14/2011 - 18:42
According to the latest statistics, CEO pay last year rose by 27 percent, while worker pay rose by just 2 percent. The median corporate CEO made $9 million last year, pushing CEO pay nearly back to its pre-recession level. But even CEO pay pales in comparison to that of hedge fund managers:
Last year was very lucrative for some of the biggest and best-performing hedge funds’ chiefs. Wealth was so concentrated that a mere 25 people pocketed a total of $22.07 billion, according to this year’s annual ranking by AR Magazine, which tracks the hedge fund industry. At $50,000 a year, it would take the salaries of 441,400 Americans to match that sum. Making matters worse, hedge fund managers benefit from preferential tax treatment that middle-income Americans don’t. Due to what’s known as the carried-interest loophole, the income that hedge fund managers receive if their funds make money is treated as capital gains — rather than ordinary income — and gets taxed at the capital gains rate of 15 percent. Even though the pay is performance-based compensation (just like any other performance-based bonus made by any other worker), hedge fund managers receive a tax break on that income.