“If you say to your tax people as he seems to have done: ‘I want every trick in the book. I want to push this to the edge,’ I will tell you that, as a private-equity guy, I’m familiar with many of the things that he did and I know many people who’ve done many of the things that he did. I do not know anyone who did everything that he did and some of what he did — like the IRA — I’ve asked fellow private-equity guys, none of us had even known this was a possible ‘trick’ if you will. So he’s pushed the envelope all the way to the edge to his benefit and I think Americans would find that very distasteful.”
~Steve Rattner, former private equity CEO
I have already written a very lengthy, detailed article on Mitt Romney’s $102 million IRA HERE in case you haven’t read it. When I read this article by William Cohan – I couldn’t help but think about how much money Romney would save from his own tax plan. It is very interesting how many millions upon millions that he would save in taxes every year under his own tax plan not to mention hundreds of millions would Republicans successfully eliminate the estate tax. Eliminating the estate tax would be the final nail out of many nails in the coffin for the middle class.
William Cohan does a great job going through in detail how Romney’s IRA could have grown to $102 million as listed on a financial disclosure form by Romney HERE:
For instance, in the hypothetical $500 million deal, with $100 million of equity, say that company did nicely and Bain sold it for $1 billion after a few years. The $400 million of debt on the company would be paid, leaving $600 million in profit for the Bain investors who put up the $100 million in equity. By the terms of the agreement between the Bain general partners and the Bain limited partners, the Bain general partners would take 20 pecent of that profit, or $120 million, leaving $480 million for the limited partners. By Romney’s agreement with the other Bain guys, he would take one-third of the $120 million, or $40 million himself.
And voila, his initial $30,000 in his IRA would now be worth $40 million from one successful deal. The good news is that he could then use the $40 million in the IRA, add $30,000 each year to it, and continue to invest in one Bain Capital deal after another. In short order, his IRA could be crackling with the up to $102 million he says is in it.
Romney famously likes to say that he only pays the taxes he is responsible for and not a dollar more. Unfortunately – he really hasn’t paid all his taxes. He is using very aggressive tax avoidance schemes and funneling his money through offshore banks in the Caymans, Switzerland, Luxembourg and other tax havens in order to minimize his tax burden. The old expression “where there is smoke there is fire” is not always an absolute truth, but in this case – Romney has clearly come to the conclusion that whatever he has in these tax returns of his is sooooo blatant and offensive, so unremarkable indefensible that he would rather throw his mom in the middle of a crowded NYC intersection than to show his own tax returns.
He has a history of avoiding taxes; he is a pioneer in the tax avoidance business. And he has made a lot of money helping rich people avoid taxes along side him. And how can someone avoid taxes through twisted schemes that don’t pass the smell test without compunction and then claim to be a guy who loves America soooooo much. This guy is so desperate to convince you that he is America #1 that he actually said this:
I believe in an America where millions of Americans believe in an America that’s the America millions of Americans believe in. That’s the America I love.
We get it. You love America … you just don’t love it enough to pay all your taxes or show your fellow Americans that as a person running for the highest office in the land that you in fact are on the up and up and have nothing whatsoever to hide despite former dishonest statements regarding your employment at Bain and tax statements. We definitely get it.
The mechanisms that Romney used to lower his tax bill to 13.7% and grow his now famous IRA to as much as $102 million in the Cayman Islands is a result of access to special tax loopholes and techniques that the average American simply doesn’t qualify for. If these loopholes were available to everyone the way they are to Romney … well then we wouldn’t be able to fund the government and we’re already struggling to do that presently.
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