Free Ebook.

Enter your email address:

Delivered by FeedBurner

« How the Rich Live | Main | 10 Commandments of Personal Finance, Commandment #10: Thou Shalt Legally Protect Thyself and Thy Family »

February 01, 2008


Feed You can follow this conversation by subscribing to the comment feed for this post.

How do I get that job? Sheesh

This is why a low Capital Gains tax is ridiculous. I make $1000 in the market I pay 15% (unless you earn less than $32k a year, then it is 5%) He makes $3,000,000,000 and he pays 15%.

Either way, you will never ever work your way to being rich. Your capital can always work harder.

I agree.
I just need enough capital to work with :)

Chris - If you raise the capital gains tax you lower the incentive to invest. Thus, if you think we have a bad economy now, think again.

What the WSJ article also notes at the end is that for every 1 John Paulson in the world, there are probably hundreds of thousands who aren't as lucky. Does Paulson "deserve" $3 billion dollars? Maybe not. But what about the guy who wins the powerball lottery?

The great thing about this country is that anyone can go out and invest in markets. Now it's of course obvious that large institutions and hedge funds clearly have many advantages over little guys. But if you work hard, get an education, and take some risks, then nothing is stopping you from rolling the dice and trying to capitalize on the markets like Paulson did.

Nothing is stopping you from going to Las Vegas either. :)

I think its completely unfair to say he didn't earn that money. He's like a commissioned salesperson. People pay him to allocate their capital and when his decisions cause that capital to appreciate, he gets a slice. That's the way the game is and he just played it extremely well. And its not like he is responsible for our country's tax structure.

Steve, he didn't just happen to get his compensation in a lightly-taxed form. The hedge funds spent a lot of time figuring out this scheme and, believe me, any attempt to close this loophole has been and will be bitterly fought by them (and their wealth). Every single middle-class person who gets hit by the AMT this year should wise up: while the feds are effectively jacking up *your* taxes, they are allowing these incredibly highly-compensated individuals to keep a bigger slice of their own earnings than their secretaries get to keep of their salaries which are orders of magnitude less.

And anyone who thinks that, knowing he would "only" make $195 million, he would have worked less hard, is being a little silly.

I don't like how you used "luck" in this post. His job is to invest in the right things at the right time. He saw the market coming to a cliff and he took advantage of it. He didn't hit the powerball, he made an educated guess and it paid out, handsomely.

'Beastlike' - Where there's potential to make money, investors will invest. Raising capital gains tax won't force them to throw in the towel and take a 9-5 job. They won't put their money in a bank to earn a measly 1%. It will simply mean they make less money from their investments while those of us who suffer from the 'bad economy' won't find it quite so difficult.

The comments to this entry are closed.

Start a Blog


  • Any information shared on Free Money Finance does not constitute financial advice. The Website is intended to provide general information only and does not attempt to give you advice that relates to your specific circumstances. You are advised to discuss your specific requirements with an independent financial adviser. Per FTC guidelines, this website may be compensated by companies mentioned through advertising, affiliate programs or otherwise. All posts are © 2005-2012, Free Money Finance.