However, when the bottom fell out of tax equity markets amidst the financial crisis of 2008 and the resulting recession, many tax equity investors withdrew from projects on the drawing boards and walked away from some projects already underway.
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Most residential solar arrays currently are funded by tax equity investors who receive a 30% tax credit for every installation.
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It also has proven a good deal for U.S. Bancorp and other so-called tax equity investors who take a 30 percent federal tax credit on each solar array installed.
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Has the Treasury done enough to increase the tax payable by private equity partners on their carry and to increase the tax payable in general by private-equity partners and their backers who are not domiciled in the UK, so that tax system doesn't favour their kind of financing and investing techniques over others?
Private equity funds and investment banks acquire hundred-million-dollar-plus equity stakes in utility-scale wind farms and solar tax equity funds.
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Banks--and most recently Google--have created so-called tax equity funds to finance those leases, in which investors get to pocket a 30% federal tax break for renewable energy projects.
And what would be the path forward to seeing that tax equity if not this particular process over the payroll?
For now, though, U.S. Bancorp, which has also provided tax equity financing to SolarCity and Sungevity, appears bullish on solar leasing.
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Instead of claiming the normal tax credits, companies could receive a grant when projects are placed in service, obviating the need to find a tax equity investor.
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The more Ryan channels Ayn Rand's John Galt, the more people will value tax equity for the middle class and a sensible safety net for the unfortunate.
You guys were talking very passionately and very consistently over the past month about the need for tax equity, and the need to make the wealthy pay their fair share.
Residential solar leases currently are financed by tax equity-funds created by banks (and most recently, Google.) In exchange, the financiers take a 30% federal tax break for renewable energy systems.
Last week the head of one UK private equity group, SVG's Nick Ferguson, said the claims may have some justification, when he admitted that some of those running and investing in private equity were paying tax at a lower level than cleaners.
If, on the other hand, the recession forced a tax equity partner to withdraw from a project already under construction, the project developer would be saddled with a major financial problem, with construction costs already committed to the project but a key financial backer now absent.
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Also disappeared from the landscape are the big tax-equity investors such as Lehman Brothers and hedge funds that underwrote windmill construction to capture their favorable tax credits to offset other gains.
Congress is considering a law that will require private-equity firms that go public to start paying corporate tax thanks to the furore over Blackstone's initial public offering in June, which the private-equity giant structured to avoid corporate tax.
SolarCity competitors like Sungevity and SunRun also are heavily dependent on tax-equity funds to finance solar leases.
With the mortgage interest deduction in place, both sources of housing finance, debt and equity, get a tax preference.
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Companies are taxed heavily for making investments with equity, yet the tax code actually pays companies to invest using leverage.
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He advised private equity firms about the tax implications of proposed acquisitions.
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Finally, all companies have long-term debt totaling no more than 50% of total capitalization (debt plus shareholder's equity) and a tax rate of at least 25%.
The reason private equity was allowed these tax breaks is that for a long time, the Treasury - under the then chancellor Gordon Brown - believed that the buying and selling of whole companies by private equity increased the efficiency of those companies, and simultaneously created a valuable new industry for the City of London.
ISAs are tax-free savings and investment vehicles that were first introduced by the government in 1999, replacing Personal Equity Plans (Peps) and Tax-Exempt Special Savings Accounts (Tessas).
They replace equity with debt, cutting tax bills and pocketing a fee for their efforts.
Many banks have transferred credit-card loans to home-equity loans, which are tax-deductible for the borrower and offer collateral for the lender.
Just two index funds like the Vanguard Total Stock Market and Total International Stock Index provide effective, economical, tax efficient global equity diversification.
And his working party supports tax breaks for equity incentives to lure managers from big companies paying big salaries, to small companies that cannot yet afford generous pay.
Carter Administration officials originally made relief for equity a cornerstone of their tax reform proposals, says Washington lawyer Donald Lubick, a former top Treasury official who worked on them.
Commerzbank delivered an annualised post-tax return on equity of 12.1% in the first nine months of this year, Eurohypo produced 8.8% and is heading for 10% by the end of the year.
Another method, now the favorite of hedge funds (as Bernard Condon explains), is to persuade corporations to buy in their own shares, shrinking their equity base and thus their tax bills.
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