The CEOs of the top corporations headquartered in America are rightly vilified for the staggering amounts of money that they earn in comparison to the average employee at their firms, in which, as reported by cnbc.com, " a report from the Economic Policy Institute, the average CEO pay is 271 times the nearly $58,000 annual average pay of the typical American worker." However, at least CEOs actually employ millions upon millions of workers and are an integral and valued part of the American economy. On the other hand as reported by forbes.com, "In 2010 the top 25 hedge fund managers combined earned roughly 4 times as much ALL 500 of the CEOs at the top of the 500 giant corporations that make up the S&P 500 index." Additionally, as reported by the nypost.com for 2017, "the top 25 highest-earning hedgies collectively made $15.4 billion last year, averaging more than $600 million each."
All of the above, serves to demonstrate that the top Hedge Fund Managers make a staggering amount of money, of which, not only is the amount of money that they earn, nearly incomprehensible in scope, but the income that they make is not taxed the way that the average American makes their money, which is by being taxed on their wages and salary income, at tiered levels which max out at 39.6%, but instead are able to avail themselves of the "carried interest loophole", which signifies that all or most of these outsized earnings that Hedge Fund Managers make are taxed at the much lower rate of 20% for long term capital gains, plus a 3.8% investment tax, which saves these Managers, many millions of dollars each year, and cheats the government and taxpayers out of seeing these super rich Managers pay their fair share.
In addition, Hedge Fund Managers, employ very few people, that is to say, as reported by pionline.com, the amount of people working at a given hedge fund was "… an average of 20 in the U.S.", whereas the mega-corporation WalMart employs 1.4 million people, in the United States, alone. The structure of compensation for Hedge Fund Managers is that most hedge funds get paid 2% for the assets that they manage, as well as 20% of the profits so generated from those assets, signifying that, the fees and profits for such management, for very large hedge funds can be truly astonishing. However, the fact of the matter is, that hedge funds do not produce anything of value or of worth, instead, they use sophisticated algorithms, game the system in every conceivable way, take advantage of knowledge that is not available to the general public, and do all sorts of inconceivable things to gain an edge in their "investments." This signifies, whether, you view this as fair or not, that basically many hedge funds, make their money by siphoning from all other investors, little bits and pieces, here and there, which are done countless times, over and over again, of which, these small edges, make for outsized returns, that essentially offer absolutely nothing of value to the equity and bond markets, but rather are best seen as a hidden tax foisted upon the unsuspecting public as well as on mutual funds, so that the returns of the average investor are negatively impacted, ever so slightly, by virtue of Hedge Fund Managers, manipulating the system so as to make themselves money.
While not every Hedge Fund is run the same way, the nature of the beast of most of these funds, is to take advantage of market inefficiencies, that benefits these Managers, at the expense of all those that play fair, so that, a very small elite of people, make incredible amounts of money, while producing nothing of value, in which, at a minimum, they shouldn't be able to escape not paying their fair share of taxes, but again, these Managers are able to manipulate the tax system so as to benefit themselves, at the expense of the average taxpayer