David Dayen

David Dayen is a contributing writer to Salon.com who also writes for The InterceptThe New Republic, and The Fiscal Times. His first book, Chain of Title, about three ordinary Americans who uncover Wall Street's foreclosure fraud, will be released by The New Press in May 2016.

Recent Articles

The IRS Will Close This Tax Loophole -- Unless Wall Street Gets Its Way

Hedge fund managers are fighting to keep a little-known tax cheat that saves them hundreds of millions, if not billions, of dollars. 

(Photo: Ray Tsang/Flickr)
(Photo: Ray Tsang/Flickr) F or nearly a decade, Democrats from President Obama on down have vowed to close the “carried interest” loophole, which allows investment managers to classify a substantial portion of their income as capital gains, benefiting from reduced tax treatment. But there’s another, even more audacious loophole hedge fund managers routinely use to further reduce their tax burden. It involves a form of laundering—cycling money through shell companies pretending to sell a specialized form of insurance. Using this technique, the nation’s biggest hedge fund managers have shielded hundreds of millions, if not billions, of dollars. A couple weeks before a deadline to comment on proposed rules to close this loophole, activists have gotten involved by demanding that the IRS act robustly. They want to highlight this elaborate tax evasion as an example of how hedge funds use whatever strategy they can devise to enrich themselves, to the detriment of ordinary workers and the...

A Chance to Remake the Fed

J anet Yellen has only chaired the Federal Reserve for a few months, but you could forgive her if she feels like the new kid in school that nobody wants to sit with at lunchtime. With the resignation of Jeremy Stein earlier this month, there are only two confirmed members of the seven-member Board of Governors: Yellen and Daniel Tarullo. Three nominees—Stan Fischer, Lael Brainard and Jerome Powell, (whose term expired but has been re-nominated)—await confirmation from the Senate. Another two slots are vacant, awaiting nominations. One consequence of the shortage of Fed governors is that regional Federal Reserve Bank presidents, chosen by private banks, now outnumber Board members at monetary policy meetings, allowing the private sector to effectively dictate monetary policy from the inside, and creating what some call a constitutional crisis . The need for two more nominees, however, provides an opportunity to reunite the progressive coalition that prevented Larry Summers from getting...

Wall Street’s Subsidy Safety Net

AP Images/Mary Altaffer
F inancial reformers in both parties have insisted for years that the largest banks remain too big to fail, and that Dodd-Frank did not cleanse the system of this reality. You can mark down this week as the moment that this morphed into conventional wisdom. In successive reports, two of the more small-c conservative economic institutions, without any history of agitating for financial reform—the Federal Reserve and the International Monetary Fund—both agreed that mega-banks, in America and abroad, enjoy a lower cost of borrowing than their competitors, based on the perception that governments will bail them out if they run into trouble. This advantage effectively works as a government subsidy for the largest banks, allowing them to take additional risks and threaten another economic meltdown. With institutional players like the Fed and the IMF both identifying the same problem, Wall Street grows more and more isolated, setting up the possibility of true reform. The idea that big banks...

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