On 3 Nov 2002 at 17:10, dsk wrote: > A Tax Break for the Rich Who Can Keep a Secret > > Some years ago the exchange funds came to the attention of > Representative Richard E. Neal, a Massachusetts Democrat. > He introduced legislation to stop them. But the legislation > never went anywhere. > > Eaton Vance, in a report to Mr. Neal last year, said its > exchange funds "are not tax shelters" and "benefit our > markets and our society" because they provide "risk > reduction that otherwise would not be achieved." > ... > No one knows how much exchange funds cost the government in > taxes because no official study of their costs has been > made. But the Eaton Vance and Goldman Sachs exchange funds > alone represent as much as $3.6 billion of deferred capital > gains taxes at current rates. > > The Congressional Joint Committee on Taxation, without any > supporting data, has written Mr. Neal to say that no > revenue would be raised by closing exchange funds because > "the class of investors engaging in swap funds" would find > other ways to avoid the tax. > > Mr. Neal said he pressed Mark A. Weinberger, who until > recently was the chief tax policy official at the Treasury > Department, about why the Bush administration would not > shut down exchange funds as loopholes, which the > administration had said it opposed on principle. > > Mr. Weinberger, the congressman said, replied that the Bush > administration "is not for or against swap funds, but we > are against taxes on capital gains in general and so we > will not take any action against the funds." > > Mr. Weinberger, who has returned to the Ernst & Young > accounting firm, and is now its vice chairman, said that he > recalled making much less-definitive remarks, but did > confirm that he said that the administration had not > developed a position on exchange funds. > > A Treasury spokeswoman, Tara Bradshaw, said the Bush > administration was not currently considering any action on > exchange funds and therefore had no policy position on > them. > ******
In all fairness, exchange funds have been around for quite some time and there were some issues regarding them which were addressed in the 1997 Taxpayer Relief Act. So my question is what was the Clinton administration position on them? Any thoughts as to why he didn't support Neal and take some action to end the loophole? Here are a couple of other bits on exchange funds: http://www.financial-planning.com/pubs/fpi/20020913100.html http://www.financial-planning.com/wwwboard8/messages/4843.html Brenda -------------------------------------------- "Radio has no future" - Lord Kelvin, 1897
