CBS News reported:
Tax cuts for the wealthy have long drawn support from conservative lawmakers and economists who argue that such measures will "trickle down" and eventually boost jobs and incomes for everyone else. But a new study from the London School of Economics says 50 years of such tax cuts have only helped one group — the rich.
The incomes of the rich grew much faster in countries where tax rates were lowered. Instead of trickling down to the middle class, tax cuts for the rich may not accomplish much more than help the rich keep more of their riches and exacerbate income inequality, the research indicates.
Carlyle Group co-founder David Rubenstein made numerous trips to Capital Hill to keep private equity's
preferred carried interest taxation. Politicians Red and Blue granted
billionaire Rubenstein's request. Rubenstein recently cashed in over 10% of his Carlyle Group stock. Hen sold 4.75 million shares before tax hikes could occur.
WSJ reported on an unusual private equity move during our current crisis.
When the economy struggles, businesses typically hunker down and preserve cash by cutting spending and dividends. During the Covid-19 slowdown, companies controlled by private-equity firms have often gone the other way, borrowing heavily to pay big dividends to their owners.
The payouts boost returns for private-equity firms but can load their companies’ balance sheets with heavy debt at a precarious moment. The maneuvers can leave companies in weaker financial shape, while helping private-equity firms lock in gains, often a few years after their initial investments.
The amount of issued debt tied to such payouts, known as dividend recapitalizations, grew to more than $29 billion this year, up more than 25% from 2019, according to S&P Global Market Intelligence’s LCD.
The payout boom is striking considering the pandemic’s economic disruption. By comparison, during the last recession, in 2008-09, such activity nearly dried up, the data shows.
Private equity underwriters (PEU) and their founders cashed in during the pandemic, helping the rich keep more of their riches and exacerbating income equality. President Elect Joe Biden's cabinet is chock full of PEUs. They generally look after their brethren. The greed and leverage boys are tight.
