It is in a nation’s interest to foster entrepreneurship — but carried interest is not entrepreneurship.
Hmm, well, mebbe. But, from Snippa:
It is entirely true that the vast majority of the activities of hedge funds do not represent entrepreneurship, largely because those who claim that this is the case actually have almost none of their own personal money at stake in the enterprises that they manage.
But carried interest is, by definition, that stake that the hedgies have in what they’re doing. It’s sweat equity.
Hey, sure, mebbe it shouldn’t be taxed as equity – I think it should but so what? – but to declare that it’s not a stake when the definition is that it’s a stake is to raise the absurdity of the analysis to new levels of gorgeousness.
The simple fact is that entrepreneurship is something that the vast majority of those who actually espouse its virtues have never partaken in, whether those espousing be most right-wing politicians, or the leaders of large business, or those who work for organisations dedicated to this promotional activity, such as the CBI. Right-wing think tank staff almost universally fall into the same category.
Presumably running the shadowy international scandium oligopoly ain’t entrepreneurship either. Because reasons.
Since 2003 (the years at City, University of London excepted) I have been a social entrepreneur, taking not dissimilar risks to create ideas that I believe of social advantage. And what all that experience tells me is that what is essential for entrepreneurship to flourish is a strong, enforced, and fair tax system that creates a level playing field where each contributes according to their ability to pay.
Now that does make sense. Given that all of his income – directly or indirectly – over those years has come either from taxation itself or people avoiding it through charitable funds…..
That is not what we have in the UK at present. The highest marginal rate of tax in the UK at this time is paid by those on below average pay.
The lowest marginal rates of tax are frequently paid by those with the highest earnings
Uh, cool. Then we should lower taxes on the poor then, right? Although when I did campaign, successfully I might add, for that rise in the personal allowance I was told by Ritchie, and others, that this was a bad idea. Ho Hum.