Major trump donor Robert Mercer owes the IRS $7 billion in back taxes. https://t.co/dANmMeMZeW — Anthony De Rosa ? (@Anthony) November 2, 2017 Does this have anything to do with Mercer stepping down from Renaissance? https://t.co/DUgX89t1Ct — Emily Flitter (@FlitterOnFraud) November 2, 2017 We were all, understandably, agog yesterday over Robert Mercer’s sudden decision to …
Things I Did Not Know: Mercer-nary Objectives?Post + Comments (119)
At the heart of the tax case is the Medallion Fund, open only to Renaissance employees, which has posted 40 percent annualized returns over a period of almost three decades.
Funds like Medallion that make frequent trades generate mostly short-term capital gains for investors, taxed at the same rate as salary. The tax code rewards investments of a year or more with a preferential, lower rate on long-term capital gains.
Beginning in 2000, Renaissance routed some Medallion investments through special options it purchased from banks. The options were tied to the value of securities held by the banks but bought and sold on Renaissance’s orders. Since the fund held the options for more than a year, it claimed long-term capital gains income on those profits, cutting its investors’ taxes roughly in half.
The IRS learned of the practice in 2008. It issued a memorandum in 2010 describing the transaction without mentioning Renaissance by name and notified field staff that it wouldn’t pass legal muster. Banks stopped offering versions of the option with tax advantages, and Renaissance exited its last such option contract in 2013…
To my admittedly inexpert eye, it seems like Mercer was pursuing a standard foot-dragging campaign to defend its legal-enough-if-nobody-looked-too-close anti-tax maneuvers — just another battle in the Long War against Big Gubmint — and nobody paid much attention, until suddenly his fair-haired boy Bannon was squatting in the Oval Office. Even business reporters have trouble finding interesting details in a years-long squabble between two sets of high-dollar lawyers, but a nice juicy BILLIONAIRE FUNDS NAZIS, SAVES $7BILLION is quite another lede.
Politico:
In recent weeks, several investors in Renaissance Technologies had come under pressure from a liberal group that said it was opposed to racist news sites, and which was pushing them to pull their money out of the hedge fund.
The group, called Sleeping Giants, targeted Michigan State University and other pension funds invested in Renaissance, seeking to tie their investments with Mercer’s own in Breitbart and Yiannopolous — and, by extension, with white nationalism and bigotry.
The campaign took off after the liberal news site Think Progress published a list of investors in the hedge fund, including Columbia University, the National Academy of Sciences, and the Robert Wood Johnson Foundation.
It resembled similar, successful campaigns against former Fox News host Bill O’Reilly, who was ultimately pulled off the air after left-wing organizers targeted his advertisers.
The 71-year-old Mercer said he will depart the Renaissance leadership effective Jan. 1.
Hell, who knows what’ll be going on in the White House by then? As the old story ends: I might die, or the king might die — or maybe the horse will talk!
I’ve always gotten the impression that Bob was perfectly happy to putter along under the radar, quanting up the dollars and sharing his “a person is only as valuable as his net worth” philosophy with employees required by contract to nod along. It seems like Rebekah is the one who desperately wants to be in the room where it happens — to be recognized as someone, a Power in her own right, not just another Ivanka or Megan McCain. Gonna be interesting to see which is more important to the guy with his hand on the bank books…
A source w/knowledge of Mercer's decision says he won't step back from politics. Rather, he will likely do *more* now.
— Nick Confessore (@nickconfessore) November 2, 2017
Sources told @Bernstein that his Breitbart expose angered people inside Renaissance https://t.co/PmUiFz38ac
— Oliver Darcy (@oliverdarcy) November 2, 2017
Super-curious if Rebekah Mercer is also angry, and if so, is she angry for the same reasons. https://t.co/7pfllAx6hu
— Daniel W. Drezner (@dandrezner) November 2, 2017