The hedge fund industry–those very close friends of Sen. Chuck Schumer–are apparently finding other ways to avoid paying taxes. Today’s The Wall Street Journal has this story:

U.S. lawmakers are examining yet another tax perk enjoyed by hedge funds: Many of these funds lend money like banks, but unlike traditional lenders, often don’t pay U.S. taxes on the profits.

Hedge funds, which control liquid pools of capital with little regulatory oversight, are a growing presence in the lending business. They increasingly take part in lending syndicates with traditional banks, often indirectly, and also make direct loans, frequently to riskier or smaller companies that may have difficulty obtaining traditional financing. Indeed, the additional liquidity provided by hedge funds has helped contribute to the boom of easy credit that is now coming to a halt.

But many hedge funds have found clever ways to avoid paying U.S. corporate income taxes on the profits from this business. They do this by using offshore affiliates and transactions designed to take advantage of a murky area in the tax law that differentiates between lending and investing activities.

    Nice. So, I wonder if Schumer, who is already running interference for the hedge fund and private equity big-shots so they won’t have to pay taxes like the rest of the rich, will also try to protect this tax dodge?