Demystifying hedge funds: a design primer

Die Abhandlung ist eine überarbeitete und erweiterte Fassung der vom Institute for Monetary and Financial Stability am 19. Juni 2006 veranstalteten Guest Lecture des Autors zum Thema "Demystifying Hedge Funds

Toward a Multiple Party Representation Model: Moderating Power Disparity

Argues that the zealous representation model of contemporary legal practice with its emphasis on primacy of the client causes lawyers to assist and motivate their clients to exploit the clients\u27 power advantages in non-litigation contexts. The article recommends that ethical rules shift to a multiple client representation model. The model would be based upon the Brandeisian lawyer for the situation and would empower attorneys in non-litigation settings to consider and evaluate the impact of their activities on other constituencies that the representation affects. Attorneys would become better able to encourage their clients to seek distributional fairness and balance in their business and personal legal activities to the possible long term advantage of both client and lawyer

Exploring the Impact of Taxation on Immigration

Rules governing admission of immigrants to stable, developed countries vary widely among countries, yet wealthy immigrants with capital to invest and highly educated immigrants receive favorable admission decisions from immigration authorities more frequently and quickly than do conflict and economic refugees who will become part of a substantially fungible labor force. As preferred immigration destination countries limit the number of immigrants they will admit — the U.S. certainly does —, admissions are likely to follow a hierarchy based on expectations that certain immigrants will contribute significantly to the economy and welfare of the destination country in a manner that distinguishes them from other applicants for admission. Admission standards and practices also may favor some applicants over others on the basis of race, religion, and country of origin. Immigration has changed the face of many economically developed countries and introduced a diversity of cultures into formerly homogeneous mono-cultures.Conflict zones and weak economies drive immigration from those areas to wealthier and more stable areas. At the same time, high taxes and regulation fuel emigration from wealthy stable economies to lower tax, less regulated jurisdictions. Labor flight to lower tax jurisdictions historically has not been prevalent because rendition of services has been location dependent. However, the rapid growth of technology has made many industries independent of the location of their service providers. Cross-border competition for some labor has grown. While top scientists and medical professionals have been in demand since at least the early years of the 20th century, demand for technology expertise has accompanied growing international reliance on technology. The emergence of English as a common, international language has removed linguistic barriers to international commerce and individuals with technical training and expertise are able both to work remotely and relocate. Competition for skilled individuals in many realms has become international and less developed countries which have devoted their limited resources to educating and training their citizens to develop expertise and skills are concerned about losing those they have educated to other countries that might offer higher salaries and better living circumstances.This paper explores the role that taxation plays in the movement of people and capital. Part I addresses the relationship between taxes and retention of capital, including tax incentives for capital investment, shifting tax burdens from capital to labor, and rules preventing the escape of capital from its current taxing jurisdiction. Part II considers how taxes supplement immigration policy to attract capital currently outside the jurisdiction. Part III contemplates whether taxes play any significant role in attracting or retaining skilled labor. Part IV looks at taxes and tax trends and identifies how they disadvantage or benefit fungible, frequently immigrant labor. Part V concludes that capital tax rate competition seems unlikely to prevent capital flight as it inquires whether anti-immigration and anti-immigrant public sentiment has contributed to the shift of tax burdens from capital to labor

Global Regulatory and Ethical Framework

This chapter reviews statutory and court sanctioned private regulatory frameworks affecting the creation of private equity (PE) funds and their primary activity of acquiring corporate enterprises. The chapter reviews U.S. legislation regulating securities, investment companies, and tender offers, state antitakeover legislation, state court decisions on hostile corporate takeovers and “poison pill” defenses, as well as European Union directives on takeovers and alternative investment fund managers. It concludes that regulation in the United States has shifted the balance of power in corporate acquisitions to incumbent management. The chapter also examines the diametrically opposed ethical views of PE funds as investment entities that either (1) acquire and destroy corporations, harm communities, and eliminate employment or (2) enhance corporate value by rooting out corporate inefficiency, increasing employment, and enhancing community value

Income Imputation: Toward Equal Treatment of Renters and Owners

This chapter argues that fundamental fairness principles demand changes in U.S. tax law to place those who rent on an equal tax footing with those who own their residences. The disparity in tax treatment of owners and renters results primarily from the failure of the tax law to include the use value from investment of capital in a personal residence in the incomes of owners. While the yield from investment in a personal residence is not cash, the yield is valuable as it replaces an outlay for dwelling use the owner otherwise would have to make. That occupancy right as an investment yield remains undiminished by any income tax. Renters, on the other hand, may not deduct what they pay for their dwelling use. Renters pay for residence occupancy with what they have left after their income from all sources, including alternative investments of capital, has been taxed

Toward a Multiple Party Representation Model: Moderating Power Disparity

Argues that the zealous representation model of contemporary legal practice with its emphasis on primacy of the client causes lawyers to assist and motivate their clients to exploit the clients\u27 power advantages in non-litigation contexts. The article recommends that ethical rules shift to a multiple client representation model. The model would be based upon the Brandeisian lawyer for the situation and would empower attorneys in non-litigation settings to consider and evaluate the impact of their activities on other constituencies that the representation affects. Attorneys would become better able to encourage their clients to seek distributional fairness and balance in their business and personal legal activities to the possible long term advantage of both client and lawyer