HowardHedge Funds in Trouble with Congress
Behind the New York Hedges
CONGRESS LOOKING FOR ANTI-HEDGE FUND FLANKS, TAX REVENUES.
House Ways and Means Committee chairman Charles Rangel, and other Democrats on his Committee, met with Treasury Secretary Hank Paulson on Thursday, Feb. 8, to tell him they want to change the tax rules that allow U.S. companies to outsource their production, export their profits to low-tax countries or territories, and postpone taxes on foreign profits (often until a ``tax amnesty'' is offered by the U.S. government). Rangel said the Committee plans hearings on the loss of tax revenue to ``offshoring,'' adding that even from Administration figures submitted with the FY 2008 budget, the loss is at least $25 billion a year, and in actuality, signficantly more.
This move mirrors ongoing legislative fights by the German and Danish governments to stop hedge funds' and equity funds' corporate looting and outsourcing, by recapturing the corporate taxes whose evasion is a key part of the leveraged takeover game. The primary means of eliminating corporate taxes through a leveraged takeover, is to pile so much debt on the target company that interest payments eliminate its taxable income; another key is the establishment of branches of the combined company in offshore tax havens, either moving production there, or moving production {costs and profits} there by other means.
