Saturday, April 7, 2012

Showing "the Carry"

The super wealthy pay lower taxes because much of their earnings are not income.  I added two lines to the above chart to display this fact.  First, private equity underwriters pay a preferred 15% tax rate called carried interest.  Second, the financial firm is a virtual nonprofit as investors and PEU owners are the only ones paying this discounted tax.  I hope this graphic makes those two points clear.