## SELL VICTORIA CAPITAL MANAGEMENT NOW!!!!

Oh this is funny!

Thomas E. Nugent is executive vice president and chief investment officer of PlanMember Advisors, Inc., and principal of Victoria Capital Management, Inc. He also writes for the National Review:P

Thomas E. Nugent on Taxing Foundations and Endowments on NRO Financial: According to a recent study prepared by Bloomberg, the value of the top-25 school endowments alone is a whopping $180 billion. So let’s do some math. The growth rate of these endowments over the past twelve months was 16.2 percent, with the managers of these funds retaining about 11.2 percent of that gain (based on a 5 percent payout). So if we assume these funds grow at a 12 percent rate over the next twenty years and distribute that 5 percent each year, their total value would be about$697 billion from growth alone. (Ongoing donations would make this total even bigger.)

Now, if the federal government imposed a 30 percent foundation tax on the investment gains of these endowment portfolios, the following would happen: The future value of the top-25 foundations would be “only” $469 billion twenty years from now — much less than$697 billion, but certainly enough to take care of each school’s related needs. However, the total revenues generated by taxing these endowments would be about $1.9 trillion over this time, enough to keep the tax man off the back of hard working Americans. Yes, let's do some math. Collecting$1.9 trillion over the next twenty years means you collect an average of $95 billion a year. If this is 30% of investment gains, that means that average investment gains are$317 billion a year. If the average return over the next twenty years is 16.2%, that means the average value of the endowments over the next twenty years is $317/0.162 =$1,956 billion.

But endowments start at $180 billion (a "whopping"$180 billion). They grow over the next twenty years to $469 billion. The average value has to be somewhere between the highest and the lowest value, doesn't it? The average value has to be somewhere between$180 billion and $469 billion--and yet Nugent says the average value is$1,956 billion.

Stupidest man alive.

Why oh why can't we have a better press corps?