Billionaire's Pipeline Business Outgrows Tax Structure He Popularized

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Two decades ago, Richard Kinder helped start a boom in reorganizing large U.S. companies so they are exempt from corporate income tax. On Aug. 11, he said he is through with the idea.
Kinder plans to buy up two companies he controls, known as master limited partnerships, for a combined $44 billion, consolidating his oil and natural gas pipeline empire under a single, taxable corporation known as Kinder Morgan Inc. The change will lower investor payouts, leaving heft to beat rivals on new projects or buy them up, he said.
The rest of corporate America is going the other direction. Everyone from phone companies to container-board makers are exploring ways to organize parts of their business outside the corporate income tax system, using MLPs or another tax- advantaged format known as a real estate investment trust. Low interest rates have fueled demand for high yielding investments, and Kinder's partnerships are among the highest.

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