Late Night FDL: What Do Financial Industry Types Think They Gain by Calling the WAAAA-mbulance?
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You might have noticed earlier this week where JPMorgan Chase CEO Jamie Dimon was once again whining about how regulators were just being so mean to the “big banks” by requiring them to maintain more capital. This time he was complaining about the new “Basel III” requirements:
Dimon said he was supportive of forcing banks to have more capital but argued that moves to impose an additional charge on the largest global banks went too far, particularly for U.S. lenders.
He was quoted as describing new international bank capital rules as “anti-American”.
“I’m very close to thinking the U.S. shouldn’t be in Basel anymore. I would not have agreed to rules that are blatantly anti-American,” he said in the interview.
“Our regulators should go there and say: ‘If it’s not in the interests of the U.S., we’re not doing it’.”
The Basel III capital rules are designed to increase the safety of the financial system by making banks build up risk-absorbent “core tier one” capital to at least 7 percent of risk-weighted assets. The biggest, including JPMorgan, have to reach 9.5 percent.
Ya gotta love how he talks about “our regulators” – you know the ones who looked the other way while Dimon and his compadres destroyed the global economy in ’08? Emptywheel takes him down nicely here and here as does Paul Krugman here.
This afternoon we have the NY Times Deal Book blog reporting:
For now, much of the debate surrounding tax changes for Wall Street has focused on raising the tax rate of so-called carried interest income, or the share of profits that fund managers are paid as part of their compensation. Currently, that income is taxed at a capital gains rate of 15 percent; the administration’s proposal would tax it at the ordinary income rate of 35 percent.
But an obscure provision in the White House’s proposed legislation has them especially apoplectic.
Buried on Page 139 of the American Jobs Act is a measure that would tax the profits from the sale of an investment-management partnership — like a private equity, venture capital or hedge fund firm — at ordinary income rate of 35 percent. Typically, proceeds from the sale of a American business are taxed at a 15 percent capital gains rate.
“The enterprise value provision that the administration has included as part of an already flawed carried interest proposal, violates basic tax fairness policy and seems to single out the private equity, venture capital and real estate industries in a punitive fashion,” said Steve Judge, interim chief executive of the Private Equity Growth Capital Council, the industry’s trade group.
The enterprise value tax first emerged as among the more controversial provisions of last year’s jobs bill that later stalled in the Senate. Indeed, when the provision first emerged from the House Way and Means Committee, lobbyists and lawyers representing the private equity and hedge fund industries thought it was a drafting error.
I mean, c’mon! How dare Wall Street casino gamblers have to pay taxes at the same rate as ordinary working stiffs? Why it is hard damn work thinking up ways to screw workers and shareholders both doncha know?
The reality is, both of the provisions quoted will most likely be removed long before the Jobs bill gets anywhere near a vote, thanks to the captive legislators from both parties which makes the whining about it that much more irritating and ludicrous.
And the video is because I can.