Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Vanguard's Bogle: Tax Breaks For Private Equity Firms are 'Ridiculous'

Politics / Financial Markets 2012 Feb 17, 2012 - 11:30 AM GMT

By: Bloomberg


Best Financial Markets Analysis ArticleVanguard Group founder John Bogle spoke with Bloomberg Television's Betty Liu yesterday at the Bloomberg Link Portfolio Manager Mash-Up conference in New York.

Bogle said that lower tax rates for certain types of gains earned by private equity firms are "ridiculous" and "I'm arguing for the capital gains rate taxable as ordinary income."

Bogle on the private equity industry:

"I would confuse Steve Schwarzman with an indexer. He may own a diversified list of stocks but it's not going to look anything like the index. And then of course, you deduct the monumental, outrageous fees, on which they pay very low taxes...Ridiculous."

"Look, I would think most people in this room would say that there should be no tax rate that is lower than the earned income tax rate that people earn by the sweat of their brow or the burrows of their brain.That should be the regular tax rate.I think that there are a lot of good arguments out there for having a higher tax rate on capital gains, in particular short-term capital gains...What is the explanation for the tax break for gambling?"

"I am arguing for a capital gains rate taxed at ordinary income.I'm also arguing for a premium tax and maybe even a transaction tax that will slow down trading...Why would you give a lower tax rate to other than the people working every day than you to on people who are, to a large extent, gambling on Wall Street?"

On higher taxes for the wealthy

"There's something that I don't like about "soak the rich."I say, equalize the sources of income, but given the income distribution, or maldistribution, in this country, you are doing the same thing.I think it's a better platform to consider where the income comes from and how it's earned and we'll tax everybody at least equality...I would also put in because there are a lot of people, the lower 99%, who own investments in the hope of building a retirement plan.I would say, just for the fun of it, top of head, maybe give them the first $10,000 or $25,000 of capital gains and dividends tax free.Is that soaking the rich or helping the poor to accumulate retirement?They happen to be the opposite sites of the same coin."

On which presidential candidate has the best tax policy:

"I'd say the Obama plan to the extent that I understand it. Everybody knows deep down that carried interest is a technical fraud...I am a lifelong Republican, but unfortunately to ruin the sentence, I am what I would call an Abraham Lincoln or Teddy Roosevelt Republican, and they are a vanishing breed.But I think that we will eventually have to come back...I don't see anything from any of the other candidates, when you do the math, whether it's Herman Cain--that just simply doesn't work.The Romney plan, I have no idea what the Gingrich plan is, and Santorum, no comment."

"As a general policy, equalize the taxes, raise the taxes on capital gains. He may not have to raise the taxes on people who earn more than $250,000 because he's going to pick up so much on the capital gains change.Again, I want to emphasize that this has nothing to do with capital formation...I look at this position as just simply logic, with maybe a touch of concern for our fellow human beings who aren't doing as well as we are all doing."

On the hedge fund industry:

"First of all, they come and go at an astonishing rate.I have no reason to believe that the hedge fund averages from Credit Suisse or wherever, are fair representation of what happens...I think what it is is some ghastly combination of greed and hope and a belief that the past is prologue.If we haven't had enough of that, if we don't learn enough...even the very good managers over time in the mutual fund industry, Bill Miller is a great example and I have a lot of respect for him, but he had a lot of bad years after a lot of good years.That is always what happens in this business....Bill Miller, from beginning to end, 18 to 20 years, is average. That is not so bad. He almost beat the index."

On hedge fund managers he admires:

"There are a number of hedge fund managers that I greatly admire. One is Steve Galbraith at Maverick, one is Cliff Asness at AQR...they've done well in the past...look at the character of the management and make sure you know what they're doing.There's not 1,000 managers that I'm madly in love with, mutual fund or hedge fund."

On equities:

"In the case for equities, my view is a very simple one.That is, in the long run, the fundamental things apply as time goes by.And that is the case for equities is based on today's dividend yield, your entry level dividend yield, and the earnings growth that follows that.I call that fundamental investing."

On ETFs:

"I am skeptical of the way they are being used.ETFs are the greatest marketing innovation thus far in the 21st century. What we should be looking at is are ETFs the greatest investment innovation of the century? Are they the best thing for investors?And the evidence is overpowering that they are not."

Copyright © 2012 Bloomberg - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


17 Feb 12, 16:57
index funds

The index fund is the greatest invention of the 21st century. I've met Jack, he is a nice guy who down to earth and smart.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in