The US government recently announced that it was considering a new tax on foreign transactions, a move that could make some hedge funds, and the entire market for private investment funds, more competitive in the long term.
While some have been pushing for this move for years, the tax has been largely under discussion in the US since 2014, when a tax on US multinationals hit a record high of $10.6tn (£7.2tn).
It was the largest tax hike ever imposed on corporations and could be the start of a wave of tax increases across the world.
The tax was originally passed in the wake of the 2008 financial crisis, and it has been criticized for being overly complex and discriminatory.
But the US Treasury Department has indicated that it is looking into ways to increase the value of its foreign transactions tax.
According to the Treasury Department, the move would reduce the amount of tax collected by the government by about $300bn over 10 years.
“In the US, we’ve already been able to reduce corporate taxes by about 5%, so this could be even more beneficial,” said Matt Susskind, a senior policy analyst at the non-partisan Tax Policy Center.
“It is the kind of tax that will increase the economy.”
US Treasury Secretary Steven Mnuchin is expected to announce the tax in the coming weeks.
According the Wall Street Journal, Mr Mnuchin will unveil a plan that would raise taxes on companies earning $10m to $25m in sales each year, on the assumption that these companies would use those funds to pay off debt.
The move would likely be part of a broader plan to cut US tax revenues.
The US economy, in fact, has been in free fall since the start.
The stock market has plunged more than 50% since December, and many economists believe that the US economy will be in for another big recession in the next few years.
However, the potential tax hikes will likely be welcomed by hedge funds that have seen their revenue decline.
According for instance, Elliott Management and Bridgewater Capital Management are two of the largest private equity funds in the world, which rely heavily on foreign investors for funds.
While the tax changes are likely to hurt the hedge funds most heavily, some argue that the tax will help the broader economy by boosting consumer spending and economic growth.
The Treasury Department is expected on Thursday to announce a similar plan to reduce the value-added tax (VAT) on consumer goods.
The VAT, which has historically been paid by consumers and companies in the form of taxes, has risen by a quarter of a cent since the beginning of the year.
“The tax increase would boost economic growth and consumer spending,” said Paul Krugman, an economist at the University of Chicago.
“You can see it in all sorts of places, not just in the rich countries.”
According to analysts at the Economic Policy Institute, the Trump administration is likely to announce tax increases on some of the other items that hedge funds use to invest their money, such as mortgage interest, dividends and stock options.
Hedge funds are typically not as heavily invested in the stock market as other investors and tend to be less cautious in their investments.