The U.S. tax code allows interest on debt to be deducted from corporate income when calculating tax liabilities, thus providing an incentive for private equity and other financial firms to use debt financing rather than equity for capital investments. Not only does this amount to a subsidy from taxpayers, but since reduced taxes increase the returns to the financial investors without creating anything for the economy, it is essentially a transfer of wealth from the public to PE firms, another example of taxpayer-financed capitalism.

Andrew deWaard, Derivative Media, loc. 460