Wouldn’t it be nice if you could decide how much of your income you pay to the government–and, then, decide how much you’d like to get back? If you could start a little business advising people on how to pull off that little stunt, you’d be a rich man.

    Welcome to the world of the Blackstone Group-the massive buyout firm which recently went public. As David Cay Johnston (who really has done some of the best mainstream reporting over the years on the destruction of the progressive tax system) reports today on the front page of The New York Times:

The Blackstone Group, the big buyout firm, has devised a way for its partners to effectively avoid paying taxes on $3.7 billion, the bulk of what it raised last month from selling shares to the public.

Although they will initially pay $553 million in taxes, the partners will get that back, and about $200 million more, from the government over the long term.

The plan, laid out in the fine print of Blackstone’s financial documents, comes as Congress debates how much managers at private equity firms like Blackstone and hedge funds should pay in taxes on their compensation.

    In the piece, Johnston gets a tax expert to explain this in really precise detail:

  

Lee Sheppard, a tax lawyer who critiques deals for Tax Notes magazine and has studied the Blackstone arrangement, said it was a reminder of the disconnect between the tax debate in Congress and how the tax system actually operates at the highest levels of the economy.

“These guys have figured out how to turn paying taxes into an annuity,” Ms. Sheppard said. “What people don’t realize is that the private equity managers, the investment bankers, all the financial intermediaries, are in control of their own taxation and so the debate in Washington about what tax rate to pay misses the big picture.”

    So that we get the context of this: Stephen Schwarzman, Blackstone’s co-founder, was ranked by Forbes Magazine as number 73 on its list of the wealthiest Americans, estimating his net worth at $3.5 billion. He lives in a 35-room Park Avenue triplex purchased for $30 million, and he also owns a 13,000-square-foot mansion in Palm Beach, Florida, a home in East Hampton, New York, and a house in Jamaica. This past February, Schwarzman threw a nice little 60th birthday party for himself at a cost of $3 million.

    He really has a need to fleece the government–and you.