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Just one-tenth of the swap funds will be available automatically.
Mr. Weinberger, the congressman said, replied that the Bush administration "is not for or against swap funds, but we are against taxes on capital gains in general and so we will not take any action against the funds".
That provides some comfort for lenders, but it leaves open the danger that swap funds will not be available until too late, and that embarrassing wrangles will undermine market confidence.Other changes in the past four years will thus be more important to regional financial health.
The Eaton Vance mutual fund company in Boston and the Goldman Sachs investment house are by far the biggest operators of investment pools based on this tax avoidance technique, with at least $18 billion of stocks in what are known in the investment business as exchange funds or swap funds.
The Congressional Joint Committee on Taxation, without any supporting data, has written Mr. Neal to say that no revenue would be raised by closing exchange funds because "the class of investors engaging in swap funds" would find other ways to avoid the tax.
Swap funds skirt capital gains on highly appreciated shares.
Similar(52)
SWAp funding had increased by 70% between 2002/3 and 2007/8 but by 2007/8 had not reached the expenditure planned for 2002/3.
Tracing the flow of the money is particularly challenging because many of the advocacy groups swapped funds back and forth.
So what is billed as a "seven-year lesson in the unexpected" proves to be a lesson in the expected: Costs are predictable, and they matter; swapping funds doesn't work very well; index funds are hard to beat.
But then a lawyer advising the team raised the idea of swapping funds with other organizations as a way of getting the money back in the state without running afoul of disclosure rules.
It offered a prisoner swap and funds for drug rehabilitation.
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