# Differing assumptions that are the basis of liberal and conservative positions **URL:** \ **Category:** Great Debates\ **Created:** [April 29, 2016, 12:53pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418 "2016-04-29T12:53:23Z")\ **Posts on this page:** 20\ **Page:** 8
**Author:** ![Bryan\_Ekers](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bryan_ekers/32/183_2.png) [@Bryan\_Ekers](https://boards.straightdope.com/u/Bryan_Ekers)\ **Post date:** [May 2, 2016, 2:40pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/141 "2016-05-02T14:40:31Z")
I just operate on the assumption that anyone who disagrees with me is stoopid. It’s worked well so far. ---
**Author:** ![tim-n-va](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tim-n-va/32/3001_2.png) [@tim-n-va](https://boards.straightdope.com/u/tim-n-va)\ **Post date:** [May 2, 2016, 3:07pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/142 "2016-05-02T15:07:15Z")
I don’t have it in front of me but in the book “Innumeracy”, the difference was explained in terms of types of errors that are desirable to avoid. With the social safety net, liberals want to structure the rules so everyone who has a need gets help. Conservatives want to structure the rules so that no one who doesn’t have a need gets help. Both want the one who have a need to get help. With criminal activity, liberals want to structure the rules so that no one gets punished who shouldn’t. Conservatives want to structure the rules so that no one who should be punished escapes. Both want the ones who deserve it to be punished. There are exceptions and fringe issues but I think that explains the bulk of the difference. Political campaigns exaggerate the differences because there is no value in saying “I’m mostly like my opponent”. ---
**Author:** ![bump](https://avatars.discourse-cdn.com/v4/letter/b/7c8e57/32.png) [@bump](https://boards.straightdope.com/u/bump)\ **Post date:** [May 2, 2016, 3:18pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/143 "2016-05-02T15:18:36Z")
> [@wolfpup](#): > > Governments can’t do anything right except put men on the moon, explore every planet in the solar system, build the international space station, make all the most important advances in basic science and medicine, build a national highway and railway and air traffic system, more or less keep the country together, and directly or indirectly administer universal health care systems in every civilized country in the world, just to cite a few examples. > > I think you’ll find that the failures of the War on Poor Black People Who Use Drugs are mainly due to the fact that conservatives like to throw them in prison. The US has the highest incarceration rate of any country in the world, which is an amazing fact when you think about it. The trouble with throwing all these people in jail is that eventually they come out again, generally with all the same problems. Yes, the US also features a particularly bad recidivism rate. Every single one of those accomplishments is a triumph of science, technology, engineering and/or administration. Poverty is highly unlikely to actually be something that can be solved in that fashion, and therein lies the rub. A government can rally the troops and marshal resources, but it can’t really effectively change a people’s mindset, or their habits, or whatever. It can incentivize, penalize and suggest, but there’s no non-invasive way to change a group’s mentality, and that’s the problem. Beyond that, “solving” poverty is a particularly ill-defined notion, as opposed to "achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth. " The former is vague in multiple ways (what IS poverty, how is it “solved”?) while the latter is very clear. That’s why government is spectacularly good at doing things like highway projects and moon landings, and spectacularly terrible at changing people’s hearts and minds. ---
**Author:** ![Thudlow\_Boink](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/thudlow_boink/32/320_2.png) [@Thudlow\_Boink](https://boards.straightdope.com/u/Thudlow_Boink)\ **Post date:** [May 2, 2016, 3:33pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/144 "2016-05-02T15:33:32Z")
> [@Bryan\_Ekers](#): > > I just operate on the assumption that anyone who disagrees with me is stoopid. > It’s worked well so far. You can leave out the “who disagrees with me” part, and it still works! ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [May 2, 2016, 3:45pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/145 "2016-05-02T15:45:00Z")
> [@bump](#): > > Every single one of those accomplishments is a triumph of science, technology, engineering and/or administration. Of course. But it was government that inspired, organized, funded, and administered those initiatives. Without government providing competent leadership at each stage, none of those things would have happened. I was responding to the claim that “government can’t do nuthin’ right” which is patently false. > [@bump](#): > > Poverty is highly unlikely to actually be something that can be solved in that fashion, and therein lies the rub. A government can rally the troops and marshal resources, but it can’t really effectively change a people’s mindset, or their habits, or whatever. It can incentivize, penalize and suggest, but there’s no non-invasive way to change a group’s mentality, and that’s the problem. The question of a government’s capacity to address problems like poverty is distinctly separate from the political will and political capital to do it. The former is clearly realistic since other countries have been largely successful at doing so, but the latter is problematic because it creates conflict between precisely the ideologies this thread is talking about. And the “solutions” that are sometime advocated are just plain nuts, like the idea that poverty should be dealt with by making it as miserable and degrading as possible so that the victims will “shape up” or something, or that the solution to drug abuse is to throw drug users in prison. Don’t blame government for that, blame misguided ideology. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 2, 2016, 3:51pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/146 "2016-05-02T15:51:38Z")
> [@wolfpup](#): > > It struck me that one could interpret this as meaning that conservatives have a balanced view of all six moral foundations, which is unmitigated bullshit. Since you had recently finished your diatribe outlining conservative views on various issues, and it seemed to me a fairly accurate characterization, your post made a convenient target for showing how poorly conservatism actually aligns with those moral foundations. Maybe…just maybe, there isn’t a monolithic conservative viewpoint. Would it blow your mind to learn that I don’t consider myself nor self identify as conservative? > [@](#): > > Just one small point on this nit. I’m aware that “marginal utility” is a term used in economic theories of consumption. But you have misappropriated it and used it to try to objectively rationalize a dysfunctional society divided between wealth and poverty in which the wealthy are presumed to have no burden of responsibility for anyone but themselves, or for the world they live in. Moral values like caring and empathy fundamentally _ **are** _ emotional, because we are a human society. In what way is the term misappropriated? It’s used accurately. The problem is, not everyone subscribes to your theory of morality. So when you make appeals to morality, those that don’t share your views treat it as if you’re speaking another language. Browbeating people about morality that they don’t share is entirely ineffective if your goal is persuasion. > [@](#): > > This fundamental dichotomy is why conservative social schemes are always such abysmal failures. We’ll reluctantly have social assistance of sorts, we’ll just make sure that it’s inadequate, painful, and degrading. We can’t possibly have universal health care because it’s socialist, but having hospitals chuck dying patients out into the street offends even conservative sensibilities (if only because conservatives have to use those same streets), so let’s have a scheme that doesn’t work, doesn’t actually provide health care, and wastes atrocious amounts of taxpayer dollars, but lets us assuage our moral conscience with false sanctimony. I find it telling that your view of folks who disagree with you is a bad caricature. I could take you more seriously if you could accurately state the motivations of the positions you disagree with. ---
**Author:** ![wolfpup](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/wolfpup/32/10618_2.png) [@wolfpup](https://boards.straightdope.com/u/wolfpup)\ **Post date:** [May 2, 2016, 4:25pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/147 "2016-05-02T16:25:56Z")
> [@Bone](#): > > Maybe…just maybe, there isn’t a monolithic conservative viewpoint. Would it blow your mind to learn that I don’t consider myself nor self identify as conservative? IIRC you’ve self-identified as libertarian, so, no, that fact wouldn’t surprise me. But do you deny that all the points you described align well with conservatism and all the things we typically hear from conservatives? Every single one? If I wanted to make the effort I have no doubt I could find many examples where conservative candidates have articulated precisely those views. Do you doubt that this was therefore a fair sampling of broadly held conservative views? > [@Bone](#): > > I find it telling that your view of folks who disagree with you is a bad caricature. I could take you more seriously if you could accurately state the motivations of the positions you disagree with. There’s a difference between a caricature and a falsehood. Caricatures are used in political cartoons and satires to illustrate fundamental truths in colorful ways. I’m describing what are incontrovertibly the results of certain conservative inspired-policies, and the ascribed motivations are far from inaccurate since I’ve heard conservatives express more or less that very same reasoning. ---
**Author:** ![magellan01](https://avatars.discourse-cdn.com/v4/letter/m/45deac/32.png) [@magellan01](https://boards.straightdope.com/u/magellan01)\ **Post date:** [May 2, 2016, 4:35pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/148 "2016-05-02T16:35:23Z")
> [@iiandyiiii](#): > > Yes, but the same poor performance for a middle or upper class kid is less likely to result in failing to graduate, since they’ll have better access to tutors and extra help, parents with more time and skills to help, teachers with more time to focus on each student, etc., on average. So a poor kid is probably, on average, less likely to graduate than a middle or upper class kid with _the exact same ability and effort_. > > The poor kid, on average, will have to work _harder_ than the effort required for a middle or upper class kid to graduate. Except if the poor kid is an immigrant from Cambodia, China, Korea or some other Asian country. ---
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [May 2, 2016, 4:50pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/149 "2016-05-02T16:50:47Z")
> [@magellan01](#): > > Except if the poor kid is an immigrant from Cambodia, China, Korea or some other Asian country. Are you saying that children from those countries don’t work harder? If not, I’m not sure what you’re saying. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 2, 2016, 4:55pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/150 "2016-05-02T16:55:58Z")
> [@wolfpup](#): > > There’s a difference between a caricature and a falsehood. Caricatures are used in political cartoons and satires to illustrate fundamental truths in colorful ways. I’m describing what are incontrovertibly the results of certain conservative inspired-policies, and the ascribed motivations are far from inaccurate since I’ve heard conservatives express more or less that very same reasoning. Ok, then can you provide support for the accuracy of these items (my bold): > [@](#): > > We’ll reluctantly have social assistance of sorts, **we’ll just make sure that it’s inadequate, painful, and degrading**. We can’t possibly have universal health care because it’s socialist, but having hospitals chuck dying patients out into the street offends even conservative sensibilities **(if only because conservatives have to use those same streets**), so\*\* let’s have a scheme that doesn’t work, doesn’t actually provide health care, and wastes atrocious amounts of taxpayer dollars\*\*, but lets us **assuage our moral conscience with false sanctimony**. It would have to be more than isolated fringe folks, but a mainstream conservative position. And only examples or cites where there was not a similarly held position by those on the left are acceptable since that was your contrast. Because really, these are wild caricatures. Put another way, how many of your assumptions of your ideological opponents have those same folks agreed with as accurate? ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [May 2, 2016, 5:21pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/151 "2016-05-02T17:21:16Z")
> [@iiandyiiii](#): > > For example – economic issues and poverty: very broadly, I believe that most liberals believe that most folks do not want to do nothing (i.e. sit on their butts all day and watch TV) – that most folks actually want to do something with their lives, and would prefer to work an okay job with okay pay (above-poverty level) and benefits than do nothing and receive bare-sustainment level government support. Therefore, I think most liberals believe that most people are poor not by choice, but by circumstance. I believe that most conservatives believe that this is false – most poor people are not disciplined enough, not talented enough, or not hard-working enough (or a combination) to succeed to the level of not being poor anymore, and would prefer bare-sustainment (poverty level) government support than working for lower-middle-class pay, and are poor mostly by choice rather than circumstance. Even with the “most” qualifier, this is overly simplistic. As you somewhat acknowledged later (in response to puddleglum) there’s no black-and-white lazy/energetic cutoff point, but that people are more or less motivated to work harder by necessity. There’s virtually no one who would not push themselves harder if the alternative was starving than if the alternative was [something-better-than-starving]. And there are very few people who would not be motivated to do anything ever just because they could live at a basic level without any effort. So the point is not an either-or question about what “most people” are like, but a question about what the net impact of the social safety net is on an aggregate (societal) basis is, over the long term and including indirect effects (including both the impact on the current and potential future poor people themselves, as well on the taxpayers as well), at various levels of benefits. That’s not remotely the same thing as “these poor people are suffering due to their own fault” in your OP. ---
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [May 2, 2016, 5:26pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/152 "2016-05-02T17:26:06Z")
> [@Fotheringay-Phipps](#): > > Even with the “most” qualifier, this is overly simplistic. > > As you somewhat acknowledged later (in response to puddleglum) there’s no black-and-white lazy/energetic cutoff point, but that people are more or less motivated to work harder by necessity. There’s virtually no one who would not push themselves harder if the alternative was starving than if the alternative was [something-better-than-starving]. And there are very few people who would not be motivated to do anything ever just because they could live at a basic level without any effort. So the point is not an either-or question about what “most people” are like, but a question about what the net impact of the social safety net is on an aggregate (societal) basis is, over the long term and including indirect effects (including both the impact on the current and potential future poor people themselves, as well on the taxpayers as well), at various levels of benefits. > > That’s not remotely the same thing as “these poor people are suffering due to their own fault” in your OP. They don’t seem mutually exclusive to me. But I started the thread with the hope of having misconceptions about conservative viewpoints and assumptions corrected (as well as hoping that the misconceptions of conservatives about liberals would also be corrected), so I thank you for your input, and I will try and keep this in mind next time I engage with someone who takes the conservative position on this issue. ---
**Author:** ![Fotheringay-Phipps](https://avatars.discourse-cdn.com/v4/letter/f/d9b06d/32.png) [@Fotheringay-Phipps](https://boards.straightdope.com/u/Fotheringay-Phipps)\ **Post date:** [May 2, 2016, 5:30pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/153 "2016-05-02T17:30:14Z")
Well I don’t think you need to “keep this in mind” in the sense of assuming that’s definitely what the guy thinks. But you can keep it in mind as what he might possibly think. There are any number of conservatives (or liberals) who might arrive at the similar conclusions based on differing rationales, and it’s worth finding out what the actual person you’re interacting with believes before making assumptions. ---
**Author:** ![iiandyiiii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/iiandyiiii/32/7924_2.png) [@iiandyiiii](https://boards.straightdope.com/u/iiandyiiii)\ **Post date:** [May 2, 2016, 5:33pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/154 "2016-05-02T17:33:00Z")
> [@Fotheringay-Phipps](#): > > Well I don’t think you need to “keep this in mind” in the sense of assuming that’s definitely what the guy thinks. But you can keep it in mind as what he might possibly think. > > There are any number of conservatives (or liberals) who might arrive at the similar conclusions based on differing rationales, and it’s worth finding out what the actual person you’re interacting with believes before making assumptions. Sounds entirely reasonable, and thank you for your input. ---
**Author:** ![msmith537](https://avatars.discourse-cdn.com/v4/letter/m/d9b06d/32.png) [@msmith537](https://boards.straightdope.com/u/msmith537)\ **Post date:** [May 2, 2016, 6:35pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/155 "2016-05-02T18:35:00Z")
> [@bump](#): > > Poverty is highly unlikely to actually be something that can be solved in that fashion, and therein lies the rub. A government can rally the troops and marshal resources, but it can’t really effectively change a people’s mindset, or their habits, or whatever. It can incentivize, penalize and suggest, but there’s no non-invasive way to change a group’s mentality, and that’s the problem. In addressing poverty, the government is limited in what it can do to mostly: -Building roads, rail and other national, state and local infrastructure -Enacting effective trade policy -Setting monetary policy -Making and enforcing regulatory requirements to prevent fraud, corruption, and harmful or predatory business practices -Establishing labor laws -Establishing national services -Providing social safety nets -Setting and enforcing a fair tax structure -Passing laws that don’t unfairly target certain groups I’m sure there is some other stuff I’m not thinking about. Of course, the problem is that conservatives and liberals have differing ideas on the specifics of how each of these bullets should be implemented. Both liberals and conservatives operate from a very idealized view of how America should be. To your point, liberals do try to legislate morality. Perhaps more than economic theory would justify. Conservatives, OTOH, seem to operate from this mindset where everyone would be happy and successful if simply left to pick themselves up by their bootstraps (or at worst, only lazy fuckups would be poor because they deserve to be). So in a sense, liberals often ignore unintended consequences of good intentions while conservatives tend to marginalize those for whom the system doesn’t seem to work as intended. ---
**Author:** ![John\_Mace](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/john_mace/32/185_2.png) [@John\_Mace](https://boards.straightdope.com/u/John_Mace)\ **Post date:** [May 2, 2016, 6:56pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/156 "2016-05-02T18:56:45Z")
Bit of an oversimplification but… Conservatives are afraid of helping too many people lest a few “undeserving” people are helped. Liberals don’t care how many “undeserving” people are helped lest a few people who truly need help fall through the cracks. Additionally, conservatives think the government should promote traditional families and discourage non-traditions families (e.g., single motherhood), where liberals think it’s NOYB, just stay out (and pay them if they’re lack in in funds). Upon seeing an epidemic of single motherhood: Liberals say: OMG!! we must help them all RIGHT NOW!!! Conservatives say: OMG!! We need to stop there being so many single mothers RIGHT NOW!! ---
**Author:** ![Left\_Hand\_of\_Dorkness](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/left_hand_of_dorkness/32/7156_2.png) [@Left\_Hand\_of\_Dorkness](https://boards.straightdope.com/u/Left_Hand_of_Dorkness)\ **Post date:** [May 2, 2016, 7:13pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/157 "2016-05-02T19:13:24Z")
The academic work that helped me appreciate conservative economics better than anything else was [Fight of the Century: Keynes vs. Hayek, Round Two.](https://www.youtube.com/watch?v=GTQnarzmTOc) It gave me a lot more sympathy for what I previously thought was a pretty unsympathetic position. Might be worth watching for both liberals and conservatives who want to understand their opposition. Plus, rap battle! ---
**Author:** ![Damuri\_Ajashi](https://avatars.discourse-cdn.com/v4/letter/d/898d66/32.png) [@Damuri\_Ajashi](https://boards.straightdope.com/u/Damuri_Ajashi)\ **Post date:** [May 2, 2016, 7:50pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/158 "2016-05-02T19:50:22Z")
> [@Bone](#): > > What is the difference between a tax loophole and an intended tax provision? Do you have an example? The carried interest exemption that is used by hedge fund managers to convert their income from compensation into capital gains. When we tip a waitress, we are giving them a gift and gifts are generally not taxable and that waitress should not have to pay taxes on that gift because we presumably are giving her that gift with after tax income. But the clever people at the IRS have figured out that a tip is actually a form of compensation that ought to be taxed at ordinary income tax rates. Hedge fund managers frequently get 20% of any gains over a benchmark rate that their hedge fund earns in a year. Lets say the benchmark is the S&P. So if you beat the S&P by 15%, then 3% of that goes to the hedge fund manager. A hedge fund is frequently a partnership and due to the technicalities of how partnerships work the 3% that goes to the hedge fund manager generally retains the same tax character (ordinary income/capital gains) and if that 15% was capital gains then the hedge fund manager recognizes capital gains on that money. The clever folks at the IRS have somehow been able to figure out that a waiter’s tips are actually compensation subject to ordinary income tax despite the technicalities of gift taxation but have not been able to figure out that the 3% that goes to the hedge fund manager is also a form of compensation that is subject to ordinary income tax. It doesn’t make it any easier for them when Chuck Schumer tells them not to figure it out (I’ve never seen him get in front of TV cameras to question the IRS treatment of tips). ---
**Author:** ![Smitty](https://avatars.discourse-cdn.com/v4/letter/s/e274bd/32.png) [@Smitty](https://boards.straightdope.com/u/Smitty)\ **Post date:** [May 2, 2016, 8:02pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/159 "2016-05-02T20:02:00Z")
> [@iiandyiiii](#): > > I consider unprotected sex, drug use (along with traffic violations, skipping school, vandalism, pranks, etc.) and some poor performance in school “average” mistakes that are extremely common. These mistakes seem to result in far worse outcomes, on average, for poor folks than for wealthier folks. Two men walk into a bar. One is built like The Mountain. One is build like Joffrey Baratheon. They get into a fight. This will result in a far worse outcome, on average, for Joffrey than it does for The Mountain. The answer is not for taxpayers to provide Joffrey with a bodyguard, or steroids, or a personal trainer. The answer is for Joffrey not to get into that fight. Similarly, [Conservative position] the answer is not for government to protect poor people from their own bad behavior, the answer is for poor people to make better choices. If you can’t take the heat, stay out of the kitchen. [/Conservative position] The difference in conservative and liberal assumptions is that liberals believe this is not fair and that something should be done about it. Conservatives believe this is completely fair as wealthier people have, through the process of earning that wealth, earned the right to use it on lawyers, or traffic fines, or whatever else they (legally) want. ---
**Author:** ![Bone](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/bone/32/407_2.png) [@Bone](https://boards.straightdope.com/u/Bone)\ **Post date:** [May 2, 2016, 8:05pm UTC](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418/160 "2016-05-02T20:05:10Z")
> [@Damuri\_Ajashi](#): > > Hedge fund managers frequently get 20% of any gains over a benchmark rate that their hedge fund earns in a year. Lets say the benchmark is the S&P. So if you beat the S&P by 15%, then 3% of that goes to the hedge fund manager. A hedge fund is frequently a partnership and due to the technicalities of how partnerships work the 3% that goes to the hedge fund manager generally retains the same tax character (ordinary income/capital gains) and if that 15% was capital gains then the hedge fund manager recognizes capital gains on that money. And you think this is a loophole somehow? I think it’s intentional. > [@](#): > > The clever folks at the IRS have somehow been able to figure out that a waiter’s tips are actually compensation subject to ordinary income tax despite the technicalities of gift taxation but have not been able to figure out that the 3% that goes to the hedge fund manager is also a form of compensation that is subject to ordinary income tax. It doesn’t make it any easier for them when Chuck Schumer tells them not to figure it out (I’ve never seen him get in front of TV cameras to question the IRS treatment of tips). You’ve identified part of the difference - the fact that the hedge fund manager contributes capital to the fund. Does the waiter contribute capital to the customer’s meal? And you think this too is a loophole somehow, that tips are considered income? Again, this seems intentional. The request is the difference between a loophole and something intentional, not tax provisions you don’t like. [Previous page](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418.md?page=7) [Next page](https://boards.straightdope.com/t/differing-assumptions-that-are-the-basis-of-liberal-and-conservative-positions/753418.md?page=9)