How wealthy Americans stay even wealthier

New York

HEDGE fund magnates Daniel Loeb, Louis Bacon and Steven Cohen have much in common. They have managed billions of dollars in capital, earning vast fortunes. They have invested large sums in art - and millions more in political candidates. Moreover, each has exploited an esoteric tax loophole that saved them millions in taxes. The trick? Route the money to Bermuda and back.

With inequality at its highest levels in nearly a century and public debate rising over whether the government should respond to it through higher taxes on the wealthy, the very richest Americans have financed a sophisticated and astonishingly effective apparatus for shielding their fortunes. Some call it the "income defence industry", consisting of a high-priced phalanx of lawyers, estate planners, lobbyists and anti-tax activists who exploit and defend a dizzying array of tax manoeuvres, virtually none of them available to taxpayers of more modest means.