Thursday, January 1, 2009

Those Who Have More, Go Offshore

Lawyers encouraged private equity underwriters (PEU's) to set up offshore entities before Baby New Year arrived. The offshore corporations needed a 2008 start date to legally meet their aim, avoiding fair taxation on income.

Such structures allow PEU's to turn "carried interest" into low cost loans, achieving the same 15% tax rate. It also shields income from any Medicare tax increases. So much for those who have more, having a greater obligation...