Comments on: CBO Director: ‘A Big Part Of Why The Deficit Deteriorated’ Is Falling Corporate Tax Revenue http://wonkroom.thinkprogress.org/2008/09/10/cbo-deficit-deteriorated/ Thu, 26 Nov 2009 16:42:01 -0500 http://wordpress.org/?v=2.8.5 hourly 1 By: stateofthedivision http://wonkroom.thinkprogress.org/2008/09/10/cbo-deficit-deteriorated/comment-page-1/#comment-2242 stateofthedivision Wed, 10 Sep 2008 22:41:58 +0000 http://thinkprogress.org/wonkroom/2008/09/10/cbo-deficit-deteriorated/#comment-2242 Private equity buyouts are a factor in the reduced tax burden. First, their highly leveraged deals run up interest expenses. In some cases, it wipes out the prior year's bottom line completely. Two, the PEU's charge the company a management fee, usually in the millions. Of course, their goal is to grow profits and cash in on the company. But the first few years after purchase, the financial structure is majorly impacted. It results in less revenues to Uncle Sam. Private equity buyouts are a factor in the reduced tax burden. First, their highly leveraged deals run up interest expenses. In some cases, it wipes out the prior year’s bottom line completely.

Two, the PEU’s charge the company a management fee, usually in the millions. Of course, their goal is to grow profits and cash in on the company. But the first few years after purchase, the financial structure is majorly impacted. It results in less revenues to Uncle Sam.

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