IMF Hedge Funds Tax

IMF Hedge Funds Tax

IMF Proposes Two New Taxes on Hedge Funds and Banks

The International Monetary Fund has proposed two new taxes on hedge funds, banks and other financial institutions to finance future bailouts.  Hedge funds would have to pay a bank levy and also taxes on profits and compensation.  This is the latest in an international effort to reform the financial system and impose stricter rules and penalties primarily on hedge funds and investment banks.
All institutions would pay a bank levy - initially at a flat-rate - and also face a further tax on profits and pay.
The measures are designed to make banks pay for the costs of future financial and economic rescue packages.
The IMF documents were made available to governments of the G20 group of nations on Tuesday afternoon and seen by the BBC soon afterwards. The plans will be discussed by finance ministers this weekend.
"The proposals are likely to horrify banks, especially the proposed tax on pay," our business editor said.
"They will also be politically explosive both domestically and internationally."
Insurers, hedge funds and other financial institutions must also pay the taxes, the IMF argues, despite them being less implicated in the recent crisis.
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