Democrats Consider Banning Offshore Tax Deferrals For Hedge Fund Managers

Oct 18 2007 | 8:06am ET

Alternative investment managers already under siege over carried interest are facing another tax fight. Two top Democrats on Capitol Hill are taking aim at offshore corporations that hedge fund managers and other rich folks use to defer taxes on an unlimited amount of income.

Rep. Rahm Emanuel (D-Ill.), the fourth-highest ranking Democrat in the U.S. House of Representatives, and Sen. John Kerry (D-Mass.), the party’s candidate for president in 2004, are separately considering bills that would bar the practice of using offshore companies to defer paying taxes on compensation, the Capitol Hill newspaper The Hill reports.

“It’s totally legal today, but the question is: Is it appropriate and is it right?” Emanuel told The Hill, echoing arguments about carried interest, which allows hedge and private equity fund managers to pay the lower capital gains tax rate on part of their performance fee income. “The bill deals with all corporate executives who are deferring income, not just those in the hedge fund industry.”

Earlier this year, the Senate approved an annual cap of $1 million on all tax deferrals, but dropped the provision in conference negotiations with the House.


In Depth

Why Ponzi Schemes Work: An In-Depth Look At The Allen Stanford Fraud

Dec 21 2014 | 10:30am ET

Texan Allen Stanford first appeared on the radars of financial regulators in 1997...

Lifestyle

Hedgie Funds US Squash Program

Dec 24 2014 | 8:46am ET

Squash, anyone?

Guest Contributor

EidoSearch’s Top Three Market Projections For 2015

Dec 23 2014 | 4:03am ET

It is that time of year again when prognosticators make their big market calls for...

 

Sponsored Content

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

December 2014 Cover

Futures 2014 person of the year

Jeff Sprecher was simply looking for a platform to trade energies when launching ICE 14 years ago but it has grown to reach the pinnacle of both the listed futures and equities world.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.