The Senate has an eye on extraordinary tax breaks that have allowed hedge fund managers to sock away hundreds of millions of dollars tax free, using their funds like giant pension schemes, the Times reports. Managers who run offshore funds can re-invest earnings in their own funds, deferring taxes for 10 years or more.
The Senate Minimum Wage Bill limits the amount managers can defer in these offshore accounts to $1 million. "We pile advantage on advantage for these managers and there doesn't seem to be any economically logical basis for it," says Vanguard founder John Bogle. "It's a very well-gilded lily to allow these tax deferrals."