Hedge Fund Tax Cheats
Heartfelt letter: Representative Heather Wilson U.S. Congress, House of Representatives Washington, DC Dear Rep. Wilson This is from the Wall Street Journal 9.14.07. I hope you are one of the lawmakers working on this. We have to close all the loopholes in paying taxes, for the good of the country. • The Situation: U.S. lawmakers are examining a tax perk enjoyed by hedge funds. • Background: Many of these funds lend money like banks but, unlike traditional lenders, often don't pay taxes on the profits. • Consensus? While some tax lawyers say these transactions are proper, others argue that many variants are legally dubious. Hedge funds, which control liquid pools of capital with little regulatory oversight, are a growing presence in the lending business. They increasingly take part in lending syndicates with traditional banks, often indirectly, and also make direct loans, frequently to riskier or smaller companies that may have difficulty obtai...