The big tax-cut bill that Congress passed last summer has made a lot of brokers and investment bankers tired--but happy--this fall. Brokers and bankers from coast to coast worked nearly around the clock over the past two weeks putting together deals under the section of the law that permits profitable companies to buy certain tax credits and depreciation deductions from firms that are losing money. (Under the law, many of the sales had to be completed by midnight last Saturday to warrant a tax break for this year.)
The brokers are hardly complaining, though, because they made piles of money in the process. Estimates of the total value of the "tax lease" transactions completed under the new law range from $10 billion to more than twice that. Brokers generally get a fee of 0.25 percent of the full value of the transaction; so the tax bill meant additional fees of $25 million to $50 million for the brokers.
Just one big investment banking firm, Salomon Brothers, estimates it has handled tax lease transactions worth $2 billion since the law was passed.
In other words, the firm earned about $5 million in fees this fall from that one provision in the new tax law.