The Hightower Report

Hiding Behind the Hedge

If your job paid $50,000 a year and you stayed at it for 47 years, your tally for a lifetime of work would be $2.4 million. Not bad – but hedge fund hustler John Paulson pulled down that much last year.

Most of us would consider an annual income of $2.4 million to be a windfall, but it didn't take Paulson a full 12 months of work to pocket his windfall – or one month, week, or even a day. That's how much he made an hour. Yes, Paulson could have worked one single hour in 2010 and hauled off a paycheck equal to what a typical household gets for a lifetime of work.

Now guess who gets the lower tax rate – the $50,000-a-year family or the $2.4 million-an-hour Wall Street man? Right. Thanks to a loophole big enough to drive an armored truck through, billionaire hedge fund dealers like Paulson escape the usual 35% tax rate, instead paying (at most) 15%.

That's more than wrong; it's immoral. In Washington, Wall Street-backed Congress critters are working fervently to kill Medicare and defund everything from education to environmental protection – all on the grounds that the only way to cope with the growing federal deficit is to bulldoze programs that Americans count on. But look behind that lush hedge over there, and what will you find? The 25 biggest hedge fund dealers who took $22 billion in pay last year. If just these 25 guys were taxed at the 35% rate, Congress would have an additional $4 billion this year to use for filling the deficit hole, rather than gleefully throwing sick seniors into it.

Since 1995, the total income of the 400 richest Americans has nearly quadrupled, yet the real tax rate they pay has been cut almost in half. America isn't broke – it's simply being gamed by superrich tax dodgers.

Ryan Peddling a Raw Deal

If you were being hustled to buy an insurance policy, would you trust a salesman who said, "Let's go to a bar, have a couple of drinks, and talk it over"? As we say in Texas: Never sign anything by neon.

Be careful then, because Rep. Paul Ryan is coming at you – winking, blinking, and grinning – hoping to sell you on his Medicare privatization plan. Ryan, chair of the House budget committee, and all but four of his Republican colleagues voted to replace Medicare with this deal. The clincher in his sales pitch is that folks over 65 "would be enrolled in the same kind of health care program that [we] members of Congress get."

"Wow," you might think. "Congress critters always give themselves the best, so where do I sign?"

Think again. Step out of the neon and check the fine print, and you'll find that Ryan's plan is nothing but a political hustle. In other words, he and his Republican cohorts are lying.

Note that they say we would get the same "kind" of coverage that they enjoy. That's like saying that someone with an old clunker has the same "kind" of transportation as a rich guy driving a new Cadillac – both have cars.

Here's the scam in Ryan's scheme: While the plan that Congress gives itself and the plan it wants you to buy are both based on the government paying a share of each individual's annual insurance premium, there's a huge gap between the share that the government pays for them and the share it would pay for us. Members of Congress only pay about 25% of the cost of their insurance, but Ryan's plan would require elderly Americans to shell out nearly 70% of the cost of theirs. And very few elderly folks get a fat congressional salary to help them buy insurance.

The GOP's privatization hustle would cost each of us more than twice what we now pay under Medicare. Don't buy their lies, and don't sign on to Ryan's raw deal.