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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: XBrit who wrote (64712)	6/28/2006 2:46:53 AM
From: shades	Read Replies (1) \| Respond to of 110194

Didn't some rich banker just get to diversify his 700 million in goldman sachs assets and beat the tax penalty? You guys just didn't have the right friends in high places eh? Message 22569394 As Goldman Sachs CEO, Hank PAULSON has accumulated ~$700MM in company stock. [Thus] it is easy to imagine that he may have wanted to diversify his portfolio a little. Profits at Goldman and on Wall Street as a whole are at record levels. In a notoriously cyclical industry, the risk that they might fall is clear. And the stockmarket has been queasy of late. Becoming treasury secretary, however, allows Mr PAULSON to sell his shares without penalty or embarrassment. Sale is required by law: no loss of faith there. And his new job is covered by Section 2634 of the Federal Ethics Laws, a blessing for every plutocrat fortunate enough to secure temporary employment with the executive branch. Under this provision, intended to ensure that TAXes do not deter capable people from accepting government jobs, Mr PAULSON is able to exchange his holdings in Goldman for various widely diversified investments. Mr PAULSON does not shed his TAX obligations entirely-they are carried over to his new investments-but he does not have to realise any gains and can thus postpone payment until he does. He can, in short, diversify without cost, as others who have trod the path from business to Washington, DC, have done before him: an agency called the Office of Government Ethics approves TAX-exempt sales by quite a few people each year (but does not disclose the number). At least someone in Washington understands the link between TAXes and employment.