Closing tax loopholes

Closing tax loopholes FRIEND,  Last year, the top 25 hedge fund managers in the United States earned more than every kindergarten teacher in America combined. Despite their huge paychecks, they pay a lower effective tax rate than most middle-class families. And thanks to a tax loophole that lets them pretend to run offshore reinsurance firms, they’re dodging even more taxes. The Internal Revenue Service and the Treasury Department are considering a proposal to close the reinsurance loophole. Sign our petition to the IRS and Treasury urging them to close this loophole! Reinsurance firms offer insurance to insurance companies. But more often than not, the companies that hedge fund managers set up are just a way to wash their money and avoid capital gains taxes. This enables hedge fund managers to pay minimal amounts in taxes on their huge earnings. Hedge fund managers don’t need the additional benefit of funneling their earnings through an offshore reinsurance company so that they can further reduce their taxes. The IRS and the Treasury Department have a duty to preserve fairness in the tax code, and the hedge fund reinsurance loophole is plainly unfair. Former U.S. Rep. David Camp has a three-prong test that would prevent abuses and ensure tax fairness. Under that test, “an insurance company would have to have more than 50 percent of its gross receipts consist of insurance premiums, have insurance liabilities equal to 35 percent of its total assets, and be subject to tax as an insurer if it were a U.S. business.” Sign this petition urging the IRS and Treasury to close the reinsurance loophole! The IRS and the Treasury Department should do the fair thing for the American people by closing this loophole. It’s only fair that people making so much money should be playing by the same rules as the rest of us. In unity, Lynne Audet National Board Certified Teacher, Perth Amboy, N.J. Randi Weingarten, President Lorretta Johnson, Secretary-Treasurer | Mary Cathryn Ricker, Executive Vice President © American Federation of Teachers, AFL-CIO. All rights reserved. Photographs and illustrations, as well as text, cannot be used without permission from the AFT. Contact Us | 555 New Jersey Ave., N.W., Washington, DC 20001

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