Last summer, mega-investor and Blackstone CEO Stephen Schwarzman — who has a net worth of about $4.7 billion, according to Forbes — said Democratic efforts to close a pernicious tax provision known as the carried interest loophole was akin to Nazi invasions during World War II. “It’s a war,” Schwarzman said. “It’s like when Hitler invaded Poland in 1939.”
This particular loophole lets private equity executives and hedge fund managers, who are some of the wealthiest people on the planet, pay exceedingly low tax rates. As billionaire investor Warren Buffet explained, “Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as ‘carried interest,’ thereby getting a bargain 15 percent tax rate.”
And it seems that Schwarzman has found his man in the 2012 election: the former private equity executive Mitt Romney:
Stephen Schwarzman, chairman of the world’s largest private-equity firm, will host a fundraiser for Mitt Romney at his Park Avenue apartment next month, a sign that Romney is closing the sale with Wall Street’s wealthiest donors.
The event marks Schwarzman’s inaugural step to help Romney secure the Republican presidential nomination, according to a person familiar with Schwarzman’s plans who spoke on condition of anonymity. He will follow up with efforts to persuade colleagues in the financial industry to get behind Romney’s presidential bid, the person said.
Schwarzman, for the record, is so wealthy that his personal chef “often spends $3,000 for a weekend of food for Mr. Schwarzman and his wife, including stone crabs that cost $400, or $40 per claw.” Yet he has vociferously fought against equalizing the tax treatment of investors like himself and the working Americans whose income is taxed at normal income tax rates.
Romney, of course, has already come out against the “Buffett rule,” the Obama administration’s proposal to ensure that millionaires and billionaires can’t pay lower tax rates than middle-class families. Romney’s net worth is about $250 million and he won’t release his tax returns (despite having previously called on his opponents to do so). However, a Citizens for Tax Justice analysis estimated that Romney pays a tax rate of about 14 percent.
Even before grabbing Schwarzman’s endorsement, Romney had been hauling in Wall Street cash. But does Romney agree with Schwarzman that asking billionaires to pay their fair share is akin to Hitler invading Poland?