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President Barack Obama is looking to hedge fund managers to cough up some of the billions needed to fund his health-care system overhaul.

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Among the eight revenue-generating measures proposed yesterday was one that close a loophole that allows hedge fund managers to avoid withholding taxes on dividends paid to their offshore holding companies. Obama’s plan would limit hedge fund managers’ use of equity swaps to defer taxes, bringing in an extra $1.2 billion over the next decade.

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The measure is similar to one championed by Democrats two years ago, when they retook the House of Representatives and Senate, and again last year. It, along with a plan to close the so-called “carried interest” loophole, would have raised $50 billion over 10 years. One of those early efforts was sponsored by then-Rep. Rahm Emmanuel, who now serves as Obama’s chief of staff.

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The offshore hedge fund loophole closure is just, however, a drop in the bucket in Obama’s plan, which would impose more than $1 trillion in new taxes over the next ten years, beginning in 2011. They also include some $58 billion in new taxes on securities dealers, life insurance projects and on estates. 

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