As a natural person, our interest payments are NOT tax deductible. Corporations get to deduct interest costs from their taxes. So PE firms are incentivized to

As a natural person, our interest payments are NOT tax deductible. Corporations get to deduct interest costs from their taxes. So PE firms are incentivized to load up the firms they attack with debt. Additionally, PE firms are allowed to use a firm's own money as collateral for the loan used to take over the firm. This includes the pension funds. So any public firm responsibly run is subject to attack. Its almost irresponsible for a firm to fund the pension fund as it will be used against the firm. The solution: 1. Require that any loan be based on the assets currently controlled by the PE firm. 2. Eliminate tax deduction for debts that are not directly tied to capital purchases.