Friday, March 5, 2010

Ohhh No Bama! Obama Treasury nominee profited from offshore tax dodge. VIDEO- Obama denounced tax 'loopholes'

Jeffrey Goldstein, the Obama administration's nominee to be the Treasury Department's Undersecretary for Domestic Finance, worked for a private equity fund that set up offshore shell corporations which allowed investors to avoid U.S. income tax, according to Senate Republican sources. The Senate Finance Committee is set to hold a hearing on Goldstein's nomination Tuesday.

The firm for which Goldstein worked was Hellman & Friedman, and the shell corporations were located in the Cayman Islands. Goldstein, who was at Hellman & Friedman from 2004 to 2008, received income from the offshore investments -- money he was able to enjoy while paying a lower tax rate than most Americans pay on regular income. Goldstein earned what is called "carried interest," which is taxed at the lower capital gains rate rather than be taxed as regular income. It is unclear how much Goldstein made during his time with Hellman & Friedman.

The arrangements appear to have been legal, but in the past, prominent Democrats, including President Obama, have strongly criticized such tax-avoidance schemes. On the campaign trail, Obama often denounced "corporate loopholes and offshore tax havens," and last May, he unveiled a plan to reform "a tax code that makes it all too easy for a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all." Just last week, Treasury Secretary Timothy Geithner, who would be Goldstein's boss, testified on Capitol Hill that "We want to close the so-called 'carried interest' loophole by taxing the income of hedge fund and private equity managers in the same way we tax the income of teachers and firefighters." Democrats have often pointed to the Cayman Islands as a particularly notorious tax haven READ MORE...

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