Friday, October 24, 2008

Disaster Capitalism Means Corporate Tax Cuts

A blue chip panel will discuss the impact of Washington's actions on credit availability. Can you guess which one served under the Clinton administration? Hint, his last name rhymes with our current V.P.'s first name, Dick. MarketWatch reported on the upcoming session:

The panel session is titled, "Wall Street and Washington Clash: The Regulatory World for Private Equity, Hedge Funds and Antitrust Cases." It will be held on November 12.

The panel will discuss how the market and regulators are affecting credit availability and explore opportunities for alternative financing. Panelists include:

William McConnell, Washington Bureau Chief, The Deal, will serve as the panel moderator.

Adam Blumenthal, Managing Partner, Blue Wolf Capital Management
David Marchick, Managing Director, Global Government and Regulatory Affairs, The Carlyle Group
Mel Schwarz, Partner & Director of Tax Legislative Affairs, Grant Thornton LLP
Robert Pitofsky, Professor of Antitrust & Trade, Georgetown University and former Federal Trade Commissioner.

"The potential for an altered regulatory and tax environment will have an enormous impact on the alternative investment community, making this one of the most controversial topics of 2009," said Mr. Schwarz.

Ex-Clinton staffer David Marchick is now the chief lobbyist for private equity underwriter (PEU) Carlyle. David testified before Congress on allowing foreign investment by sovereign wealth funds. The Carlyle Group sold a chunk of the firm to a United Arab Emirates SWF.

Both private equity and foreign funds fat from oil money have been proposed as saviours of financial institutions. But they're waiting for fire sale prices and might even propose preferred tax conditions for their entry.

The horizon isn't all negative. A Democratic led Congress failed to challenge PEU managers' preferred taxation on carried interest.

John McCain proposes a cut in corporate income tax and capital gains tax rates. His proposal is remarkably familiar to the one proposed by The Carlyle Group's Charles Rossotti to a Senate committee two years ago. Mr. Rossotti worked for the Clinton administration as head of the IRS.

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