Monday, September 03, 2012
Tom Hamburger, Washington Post
Submitted by: Editor

Original Romney: The “Honest” Tax Cheat

Mitt Romney is a tax cheat. Yes, it is possible to game the tax system without "technically" breaking any laws and there is no question that Mitt Romney has taken advantage of every angle and every loophole his accountants and lawyers can exploit in the U.S. tax code to profit from his investments.

"We don't deserve such a nice man for president."

I recoiled when I read this statement posted by someone I know on Facebook. Never mind that the article referenced by this individual was written by a Republican think tank and outlines in minute detail all the gratuitous, supposedly saintly deeds Mitt Romney has done over the years to benefit mankind. Never mind that it is an election year and the author's bias is so overwhelming that anyone with a brain should have the intelligence to see through the sugary coating. Never mind that there are far too many people for whom "conservative" has become a blind ideology of paranoid partisanship and fear. All this nonsense is beside the point. 

Mitt Romney didn't "build" anything from the ground up. He was ushered into corporate America on the bejeweled coattails of fabulous wealth and a level of socioeconomic status that guarantees entry into a circle of wealth that exists only in plebeian fairy tales. He didn't raise $37 million dollars to start his first fund with his newly formed company Bain Capitol on the merits of his intelligence or his inestimable work ethic. He raised $37 million from his family's network of high-powered friends and associates. His "success" was preordained.

But what of the man?

The truth is, Mitt Romney may well be a nice man. And he is, without question, a tax cheat who has willfully gamed the tax code and used his massive wealth and influence to a degree that should cause anyone to pause and question the motivations of the man. The bulk of his wealth is secreted away in foreign tax havens, he established a corporate front in the Cayman Islands to create a blind trust to "manage" his wife's financial holdings, and he structured his severence from Bain so that he will continue to recieve highly lucrative benefits for years to come.

[WAPO] He did so, in part, the way millions of other Americans do — with the tax benefits of an individual retirement account. But he was able to turbocharge the impact of those advantages and other tax breaks in his severance package from Bain in a way that few but the country’s super-rich can ever hope to do

As a result, his IRA could be worth as much as $87 million, according to his estimates, and he can continue to earn tax-advantaged income from Bain more than a decade after he formally left the firm.

This point is worth repeating: Romney's IRA is worth nearly $100 million. Given the verifiable fact that IRA annual percentage rates are below 1%, how is it even possible to use an IRA to earn tens of millions of dollars? And why can't we all earn such incredible returns on our retirement investments?

The argument goes that he isn't doing anything illegal. Fair enough. He may be following the letter of the law. But he is taking full advantage of loopholes to exploit every opportunity his wealth allows him the leverage to abuse. In this case, the tax loophole referred to as a "carried interest deduction".

[WAPO] “Carried interest was intended to motivate managers going forward,” said Victor Fleischer, an expert in carried interest at the University of Colorado law school. “In cases like the Romneys, it just shows it is really all about fancy tax planning. It’s not motivating managers going forward. Not only is Mitt not providing any future services, Ann never did.”

Whether or not you are technically breaking any laws, taking full advantage of loopholes in the tax law is still cheating.

The moral of the paranoid story: Nice men can be cheaters ... and presidents ... as long as they aren't black. 

Read more about this Honest Mitt here >>

Posted by Editor on 09/03/12 at 05:24 PM •  (0) Comments


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