Loophole Closed - No Tax Deferral for Hedge Execs
posted on Thursday 13 Dec 2007 09:53 GMT From Bloomberg - see full story
Bloomberg reports: Hedge fund executives won't be allowed to defer taxes on unlimited funds in offshore accounts under a bill approved by the U.S. House today that also shields millions of taxpayers from the alternative minimum tax. The $53 billion proposal, which also expands the child tax credit, passed 226 to 193, mostly along party lines. The Bush administration has threatened to veto the legislation. The measure also delays a 2004 law that allows corporations flexibility in allocating interest expense worldwide to reduce taxes and requires companies to show that tax-reduction strategies have a true business purpose. Representative Charles Rangel, chairman of the House Ways and Means Committee, proposed the legislation, which extends a standoff between House Democrats who want to abide by pay-as- you-go budget rules and Senate Republicans, who want to rein in the minimum tax without boosting other levies. The failure to reach an agreement means millions of taxpayers' refunds will be slowed next year, according to the Internal Revenue Service. "Senate Republicans have defined themselves as an obstacle to providing responsible AMT relief," Rangel, a New York Democrat, said in a statement. The new House bill gives "the Senate one more chance to do the right thing and pass this critical tax relief without adding to the deficit."