Just One Hedge Fund Dodged $6 Billion in Taxes, Senate Committee Finds
Sen. Carl Levin's Subcommittee on Investigations looked into some shady banking practices and reported that a hedge fund of Renaissance Technologies LLC found a clever way of cheating the IRS.
Shutterstock
Sen. Carl Levin’s Subcommittee on Investigations looked into some shady banking practices and reported that a hedge fund of Renaissance Technologies LLC found a clever way of cheating the IRS.
With the help of two banks, Barclays and Deutsche Bank, Renaissance was allegedly able to make short-term profits look like long-term profits. The difference, which Levin, a Democrat, calls fictitious, is in the tax bill. According to Bloomberg, “Under current law, profits from short-term capital gains are taxed at marginal federal rates of as much as 44.4 percent, compared with a 23.8 percent top rate for long-term gains. For some earlier years, the rates were 35 percent and 15 percent.”
That distinction means that over 14 years, Renaissance saved $6 billion in taxes and, for their assistance, the banks raked in $1.1 billion.
Both banks ended their participation after the IRS got interested, and Renaissance denies any wrongdoing. In a statement, the hedge fund said its actions were “appropriate under current law.”
— Posted by Peter Z. Scheer
Rock Solid JournalismIn 2026, amid chaos and the nonstop flurry of headlines, Truthdig remains independent, fact-based and focused on exposing what power tries to hide.
Support Independent Journalism.
Environment
As the country moves to intensify mining and oil operations, environmental and Indigenous leaders’ bank accounts are being frozen or closed.
Economic Justice
Elizabeth Warren (D-Massachusetts) and J.D. Vance (R-Ohio) have joined forces in a rare bipartisan effort to make top executives pay for their mistakes.
Lessons learned from the 2008 financial crisis show that taxpayer-funded blank checks to institutions do nothing to help those struggling
Because our banks aren't nationalized, its inability to work with Congress has resulted in another botched attempt at crisis management.
Its forced choice to bankroll hedge funds and other speculative ventures in repo market comes at a price to the middle class.
The Massachusetts senator and Democratic presidential contender wants to make it harder for big banks to prey on consumers.
You need to be a supporter to comment.
There are currently no responses to this article.
Be the first to respond.