In researching the profits The Carlyle Group made off the sale of United Defense Industries, a question came to mind. How much did key board members of UDI save in capital gains taxes under Bush’s low taxes plan? I pointed out 5 members of the Board and the profits they pocketed in an earlier post. (Numbers are rounded but closely approximate the actual figure)
William Conway's gross proceeds $15,000,000
Assuming a $15 basis per share in light of the $75 closing price, the profit equates to 80% of the total amount.
William Conway's capital gain $12,000,000
Under the old tax schedule Mr. Conway would have paid 20% of his profits as capital gains, while the Bush plan has people paying 15%
Old rate $2,400,000
Bush rate $1,800,000
Mr. Conway saved $600,000 under the current administration’s tax scheme on one transaction.
The other 4 board members combined pocketed roughly $8 million in the transaction. Using similar assumptions the capital gain would be $6.4 million.
Old rate $1,280,000
Bush rate $ 960,000
The other members saved $320,000 under Bush’s plan. Five already rich gentlemen saved nearly $1 million in capital gains taxes in the sale of one company. This is dwarfed by the profits The Carlyle Group obtained of over $3.5 billion from owning UDI.
As the Bush team asks poor people on Medicaid to pay a portion of their premium as well as increasing deductibles and co-pays, it is important to understand why.
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