Hedge fund run by Robert Mercer, who funded anti-DeFazio SuperPAC, may have dodged $6 billion in taxes
It's a stunning story. According to an investigative report authored by Senators Carl Levin (D-MI) and John McCain (R-AZ), a handful of Wall Street banks and hedge fund managers created an "alternative universe" of financial transactions based on "a series of fictions" designed to help them avoid massive taxes.
According to the report, one firm -- Renaisssance Technologies -- may have dodged over $6 billion in taxes alone. (No, that's not a typo.)
You might remember Renaissance Technologies as the Wall Street hedge fund whose CEO is Robert Mercer -- the model-train enthusiast who personally funded the SuperPAC designed to take down Congressman Peter DeFazio in 2010 and 2012.
Why does Mercer want so ardently to defeat DeFazio, of all people? Here's a detail from the Levin/McCain report that tells the story, as reported by the NY Times:
Over the same one-year period, Renaissance Technologies would execute on average 26 million to 39 million trades in stocks and bonds, many of those positions being held for just a few seconds, according to the subcommittee’s findings.
Yup, at least 26 million trades a year -- that's 500,000 a week. And that makes Peter DeFazio a serious threat to this particular hedge fund manager's way of life. After all, DeFazio's the fellow who has proposed taxing every single individual trade -- not 10%, not 1%, not even 0.1% -- but just 0.03%. Three cents on every $100 trade.
And while a 0.03% tax would cost you -- were you to be fairly successful and socking away $1000 a month for your retirement -- a whopping $3.60 a year, it would cost guys like Robert Mercer millions. Maybe even tens of millions. Or hundreds of millions.
Or more likely, it would mean that doing 500,000+ trades each week would no longer be a plausible strategy -- thus helping end automated trading and the inherent risk of "flash crashes" and other plagues on our economy.
No word yet on whether Mercer -- like his puppet, Art Robinson -- is back for a third shot at DeFazio, though he's already in for the legal max of $5200 in direct donations.
By Kari Chisholm
July 24, 2014
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