Hedge funds buy companies, make some changes, and then sell them or their parts off at a vast profit. Their managers receive enormous compensations (hundreds of millions) for this which are not taxed as income but at the much lower rates of capital gains (max 15%). That is not the end of it. One hedge fund Blackstone recently went public to the tune of $4.75 billion for its managers. On this, they paid $553 million in taxes, most of it at the 15% rate. It does not end here. Managers maintain that their going public represented a sale of $3.7 billion worth of the company’s brand identity (called its "good will") and are currently claiming deductions based on the depreciation of the Blackstone brand (for going public), not at the 15% capital gains rate but at the much higher 35% income tax rate. Over 15 years, this deduction will result in a return of $750 million to them or $197 million more than what they originally paid in taxes. We will end up paying them for taking their company public and for the huge profit they made doing so. The rich are not like us, and neither are the laws that cover them.