August 21, 2008 | Read Time: 1 minute
Tax bills proposed in both the House and Senate would give hedge-fund managers a generous new tax deduction for charitable donations as a way to promote philanthropy. Hedge funds use a wide range of investments to protect or hedge against a range of changing market conditions.
Under the proposed bills (called “extenders” because they would extend various tax provisions), hedge-fund managers would be allowed to receive a full tax write-off for every dollar they donate to charity — up to 100 percent of their deferred compensation.
Other taxpayers are allowed to deduct donations up to 50 percent of their annual income.
Sen. Charles Grassley, the Iowa Republican who is the senior minority member of the Senate Finance Committee, called the proposed deduction for hedge-fund managers unfair.
“Everyone is obviously in favor of charity, but treating wealthy hedge-fund managers better than your average American makes no sense from a tax-policy perspective,” Mr. Grassley said in a written statement.
