The Senate Finance Committee is interested in taxing sovereign wealth funds. Or at least they want to learn more: Baucus and Grassley have asked the Joint Committee on Taxation to write a report.
Meanwhile, on the non-tax front, Gilson & Milhaupt have posted Sovereign Wealth Funds and Corporate Governance: A Minimalist Response to New Mercantilism. They suggest suspending the voting rights of SWF equity investments (the voting rights would return when sold to a private investor). Seems very sensible, and a good start, although I'm not sure that it's sufficient to fully address the concern. If you are a 10% owner of a publicly traded corporation, I'm not sure you need voting rights or a board seat to have influence over corporate policy. Still, Gilson & Milhaupt's proposal seems like a sensible place to start the corporate governance discussion. See also Paul Rose, Sovereigns as Shareholders. Paul prefers the best practices / code of conduct approach.
I hope to post my own tax-focused paper in a couple of weeks. Stay tuned ...
Current Law on Taxing Sovereign Wealth Funds: Why It's Good to Be the King (March 5, 2008)
Taxing Sovereign Wealth Funds (March 4, 2008)
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