Deconstructing the tax debate

Wed Dec 5, 2007


Who cares about carried interest? Offshore deferral is a bigger issue for most hedge funds - and is much more likely to get the ax


Who cares about carried interest? Offshore deferral is a bigger issue for most hedge funds - and is much more likely to get the ax

By Michelle Celarier

When Senator Hillary Clinton met with a group of hedge fund donors earlier this year, she expected to be barraged by complaints about proposed tax hikes on hedge funds - hikes that have been endorsed by most of the Democratic presidential hopefuls, including herself. "I suppose you want to talk about carried interest," Clinton said, referring to the proposal to eliminate capital gains treatment for partnership incentive income based on long-term investments.

But nary a word was uttered about the controversial tax change, according to one person in attendance. Perhaps the tax didn't really matter to these hedge fund execs. Or maybe they had already come to the conclusion that the loophole was here to stay. After all, Charles Schumer, the powerful Democratic Party...

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