President Obama and the business community have been at odds for months. But in July the chairman and cofounder of the Blackstone Group, one of the world’s largest private-equity firms, amped up the rhetoric. Stephen Schwarzman—the leading John McCain supporter in a firm that, in 2008, gave more money to Obama—was addressing board members of a nonprofit organization when he let loose. “It’s a war,” Schwarzman said of the struggle with the administration over increasing taxes on private-equity firms. “It’s like when Hitler invaded Poland in 1939.”...
Schwarzman’s original beef with Obama grew out of a 2008 campaign promise that “carried interest”—the compensation structure of private-equity-fund managers—would be taxed as ordinary income (35 percent) instead of capital gains (15 percent). Obama and many Democrats have argued that it’s unfair for people like Schwarzman, with a net worth of about $8 billion, to pay taxes at a lower rate than their secretaries and chauffeurs. More substantively, the commissions and fees that hedge-fund managers reap (20 percent of their clients’ profits) are not, strictly speaking, capital gains because the managers themselves never held the stocks.
Yeah, and a progressive income tax is like the Holocaust. (Hey, as long as we're going all Godwin, why not go all the way?)
Schwarzman is also angry at the president for some of his rhetoric (Obama has talked of “fat-cat bankers”) and for not having a prominent former CEO in his cabinet or inner circle—concerns shared widely throughout the business community, including among Democrats. “Steve thinks the president lacks an intuitive feeling for the role of capital markets,” says a Wall Street executive who knows Schwarzman. “Obama is from Mars and Steve is from Venus.”
This guy is worth eight billion, meaning he's a incredibly wealthy man, while average folks are having a really rough time of it these days. Yet he's complaining about his taxes possibly going up and that (as the Balloon Juice crew would put it) his tender fee-fees are hurt. It seems like "carried interest" always should have been taxed much, much higher anyway, he'd be getting off easy even with the proposed increase, and he had a ridiculously sweet deal for a long time. These are not the sufferings of Job. While tax rates should be set rationally - which would entail raising taxes on the super-wealthy anyway - I'm thinking Schwarzman's grandiose feelings of victimization give a little extra incentive.
While not every wealthy person, not even on Wall Street, acts this way, if you've been following the news this past year, you know Schwarzman's attitude is hardly rare in his circles. I think it's time to revisit another Schwarz post, from October 2008:
Who wouldn't be stunned when the most greedy, venal, vicious, cruel, arrogant, ignorant human beings on earth aren't eager to work in the public interest? Especially when people like them have never been willing to do so in the entire history of mankind, except on the rare occasions when they've been directly threatened with execution? It's stunning!