A couple of weeks ago, Carl Icahn took to Twitter to “accept” Donald Trump’s offer to become Secretary of Treasury should America, in a fit of extreme frustration with business as usual inside the Beltway, do the previously unthinkable and put Trump in The White House.
1/3 After last night’s debate I decided to accept @realDonaldTrump offer for Secretary of Treasury.— Carl Icahn (@Carl_C_Icahn) August 7, 2015
According to a series of statements Trump made on Friday at a "pep rally" held at an Alabama football stadium, Icahn would also be in charge of negotiating trade deals with Japan and China in a Trump administration.
"Everyone is killing us" Trump told a crowd estimated at about 20,000, adding that when he was told of China’s move to devalue the yuan he heard a "sucking action."
But lest anyone should think that Trump’s cozy relationship with Uncle Carl means the Teflon Don would go easy on billionaire hedge fund managers, the GOP frontrunner told CBS’ Face The Nation on Sunday that the hedgies are just a bunch of "paper pushers [that] get away with murder" from a tax perspective. Here’s Reuters:
"The hedge fund guys didn't build this country. These are guys that shift paper around and they get lucky," Trump said.
"They are energetic. They are very smart. But a lot of them - they are paper-pushers. They make a fortune. They pay no tax. It's ridiculous, ok?"
Trump's comments were referring to the so-called "carried interest loophole" - a provision in the tax code which allows private equity and hedge fund managers pay taxes at the capital gains rate instead of the ordinary income rate.
Many fund managers are in the top income bracket, but the capital gains tax bracket is only 20 percent.
While these individuals are also required to pay an additional 3.8 percent surtax on their net investment income, this total rate is still far lower than the 39.6 percent rate that top wage earners must pay on their ordinary income.
"Some of them are friends of mine. Some of them, I couldn't care less about," Trump said.
Trump went on to suggest that he would move to restore America's Middle Class which, as regular readers are no doubt aware, is being eroded by a monetary policy regime bent on inflating the value of the assets most likely to be concentrated in the hands of the wealthy.
"I want to lower the rates for the middle class. The middle class is the one, they're getting absolutely destroyed. This country doesn't have—won't have a middle class very soon," he said.
But he wasn't done.
Trump then took to Fox & Friends on Monday morning to explain why he doesn't support anything that even looks like a flat tax before suggesting that no matter what she says on the campaign trail, Hillary Clinton can't be trusted to eliminate the carried-interest loophole because when she hangs out in the Hamptons, it's "with the hedge fund guys." Here's WaPo:
"The one problem I have with a flat tax is that rich people are paying the same as people that are making very little money," Trump, who is worth an estimated $2.9 billion, said Monday morning on "Fox & Friends." "I think there should be a graduation of some kind."
Clinton said she'd close the loophole, and while Trump didn't mention carried interest specifically, he did say that hedge-fund managers should pay more in taxes.
"They should be taxed a fair amount of money," he said, without offering details. "They're not paying enough tax."
He later criticized Clinton as being too close to Wall Street.
"The hedge-fund guys are the ones that are giving her the money," he said. "When she was in the Hamptons, she was with the hedge-fund guys."
Reading the above, one is left to wonder if Trump is leaving himself open to criticism regarding the consistency of his message. That is, when one is a billionaire and has just endorsed another billionaire (who is perhaps the most recognizable hedge fund manager in the history of capital markets) to be Treasury Secretary, to then turn around and call billionaire hedge fund managers "paper pushers" who "didn't build this country" and consistently "get away with murder" at tax time, might well strike some voters as contradictory or even hypocritical, even if the idea that an unfair tax system is contributing to the demise of the Middle Class turns out to be a message that resonates with large blocks of voters.
If building a platform on an ad hoc basis ultimately proves to be sustainable, then all the better for Trump's chances, but even if he were to run as an independent, it's critical that voters be able to figure out how the pieces fit together. That is, it's not enough to be consistent and emphatic on individual issues (e.g. "I'm tough on immigation" and "I think billionaires should pay more taxes"), Trump will eventually need to figure out how to take his positions on the issues and turn them into a cohesive platform that voters can understand and, perhaps more importantly, that doesn't end up tripping over itself when the debates start getting serious.
If he can do that successfully, then the rest of the field - both Republicans and Democrats alike - may face an uphill battle when it comes to slowing Trump's momentum.
In the meantime, things seem to still be going well:
New Reuters Poll just came out and has me at 32%, highest number yet.The silent majority is back and we will MAKE AMERICA GREAT AGAIN!— Donald J. Trump (@realDonaldTrump) August 23, 2015
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Bonus: Trump's new campaign message for Jeb Bush