Monday, August 2, 2010

Pete Peterson's Capital Gains Tax Break

Blackstone Group co-founder Peter G. Peterson is rounding the blogs. It behooves America to recall how Pete made the fortune that started his foundation. Peterson reaped billions from Blackstone's selling a stake to China and an independent public offering.

China purchased 10% of Blackstone for $3 billion
Blackstone went public snaring $4.1 billion in proceeds

Peterson and his partner Stephen Schwarzman got $4.5 billion from the two sales. A review of their combined tax savings shows:

Bush capital gains tax cut (15% vs. 20%) saved the pair $225 million

Carried interest taxation vs. income (15% vs 34%) saved the duo $855 million
A 2008 NYT piece shows Pete's patriotism:

Increasing the 15 percent rate for so-called carried interest, compared with ordinary tax rates of roughly double that, would force private equity companies overseas. “There are so many other partnerships, why pick on this high-growth sector?”

Peterson's is the son of Greek immigrants. He'd jump a ship to where if carried interest is taxed as income?

It's also worth remembering who cut 50,000 jobs at CitiGroup. Pete Peterson and Bob Rubin, pictured together above.