Very few Americans really understand the loopholes that exist for America’s wealthiest people; Mitt Romney knows about it all to well. This is a man who made a career out of lobbying for and exploiting loopholes like the “carried interest rule. As we’ve written about here at IACWE - the “carriest interest rule”:
This essentially means that if he’s managing someone else’s money…he isn’t making a salary or regular income which could be taxed at 35%…no – by making money off of SOMEONE ELSE’S INVESTMENTS – he only has to pay 15%. And we all know – he paid less than 14% in taxes over the past two years as he made over $60 million as a self-described “unemployed” man.
Now – Bain Capital actually LOBBIED for this loophole and Mitt Romney and his political campaign have defended the “carried interest rule” quite openly. Now – watch this video on CNBC and remember a few things:
#1 – Mitt Romney is highly educated as to what the “carried interest rule” is and is not. He already knows how it should be defined but refuses to take a position by “punting” on the issue
#2 – Mitt Romney went to Harvard; he’s a smart guy.
#3 – Mitt Romney’s campaign is openly defending the “carried interest rule” CURRENTLY
#4 – Mitt Romney is currently receiving millions in tax breaks personally due to this provision, but more importantly – 100% of his big donors are.
You haven’t heard of carried interest? Basically, it’s a share of investment income that goes to the private equity manager who oversaw the investment. Romney’s carried interest income doesn’t come from dividends on stock he owns, nor from the sale of stock that he once owned. The money wasn’t generated from income that he had already paid tax on. Think of it as being sort of like a tip skimmed off the top of all the money that his company makes for its investors.
But unlike tips for a waitress or cabbie, which are taxed at the same rate as wages, Romney’s carried interest income is taxed at the same 15% rate as other investments. The discounted carried interest tax rate — which is moderately controversial, but would be probably be seriously controversial if more people understood it — has come under heavy attack in recent years, but is still in effect.
Reuters explains the carried interest loophole for private equity firms and the very rich:
For more information on Mitt Romney’s position on taxes – click here: Study: Romney Tax Plan Heavily Tilted to Those With Highest Incomes. We’ve shown other analysis’ of Mitt Romney’s tax plan HERE, HERE, and HERE.
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