Wall Street is up in arms over Obama administration proposals to make banks pay a greater share of taxes. Stephen Schwarzman, billionaire chairman of Blackstone Group, a private equity firm, recently compared President Obama to Hitler. Schwarzman says, “It’s a war. It’s like when Hitler invaded Poland in 1939,” Newsweek reports.
Schwarzman supported John McCain during the last election.
The Blackstone chairman later apologized for his over-the-top remark. “I apologize for what was an inappropriate analogy,” he told the New York Post.
Comparisons of President Obama to Hitler are widespread in the tea party movement.
At stake is making Wall Street high-flyers pay taxes at rates comparable to lower level employees like janitors and administrative assistants. The administration’s proposed legislation would raise the tax on a type of compensation for fund managers called “carried interest,” taxing it as ordinary income. Currently this income is taxed at the lower capital gains rate of 15 percent: Obama would increase the rate to 35 percent.
Newsweek reports, “The issue grew more complicated this year when Congress made noises about taxing the sale of private partnerships as ordinary income, not capital gains. This aroused the opposition of thousands of real-estate ventures and other businesses far afield from the hedge-fund world.”
The Private Equity Council, a finance capital trade group, is campaigning aggressively against the hikes. It issued a statement that said in part, “This punitive, 157 percent tax hike on growth investment by real estate, venture, private equity and other firms will hurt those companies that are most desperately in need of capital to sustain or create jobs and drive growth.”
The New York Times writes that “Mr. Schwarzman is genuinely angered by the Obama administration’s attitude toward the business community. A person close to him told DealBook that the private equity mogul feels that many firms have been the subject of scorn and contempt above and beyond their role in causing the financial crisis.”
Apparently the Blackstone banker isn’t alone. GE’s chief executive Jeffrey Immelt a few weeks ago voiced similar sentiments while in Italy, saying, “Business [does] not like the US president, and the president did not like business.”
GE later backed partly away from the statement, saying it was taken “out of context and, in some instances, inaccurately reported. Mr. Immelt’s comments at a private dinner focused on the relationship between business and government in general and did not single out President Obama.”
GE has spent “$7 million lobbying the government in the first quarter of 2010,” American Banking News reports, “up from $6.8 million the previous quarter – on issues from health care reform to consumer protection.”
The Business Roundtable and the U.S. Chamber of Commerce have been fighting hard against Obama administration measures like the recently passed financial reform, claiming it’s bad for business.
President Obama’s Saturday radio address probably didn’t make big business any happier, when he “defended Social Security from the specter of privatization by declaring that the safety net should not be left vulnerable to ‘the whims of Wall Street traders.'”