Try as they might to shift to the economy, something always gets in the way for the Romney campaign. In this case, it’s the actions of Mitt Romney throughout his life to wall off his fortune from the Internal Revenue Service and ensure a continuing Romney aristocracy for the next generation.
First, even by what little we know from the release of Romney’s own tax returns in 2010 and 2011, we can divine that he took advantage of a particular investor status to save millions.
“As we have said many times before, Governor and Mrs. Romney’s assets are managed on a blind basis. They do not control the investment of these assets. The investment decisions are made by a trustee,” spokeswoman Michele Davis said.
But according to his 2010 tax return, when the Internal Revenue Service comes calling in April, Romney has a different answer: The presumptive GOP nominee reaps lucrative tax breaks for “active” participation in the private equity firm he founded, as well as a host of other investments [...]
The IRS advises that “[f]actors that indicate active participation include making decisions involving the operation or management of the activity, performing services for the activity, and hiring and discharging employees. Factors that indicate a lack of active participation include lack of control in managing and operating the activity, having authority only to discharge the manager of the activity, and having a manager of the activity who is an independent contractor rather than an employee.”
Even if Romney could persuade the IRS his involvement was legitimately active, that still leaves him in a rhetorical jam: For tax purposes, he claims an active status; for political purposes, he claims to have zero to do with the investments.
The active investor designation allows Romney to write off losses at a 35% rate, while capital gains are paid at a 15% rate. As the HuffPo scribes put it, “Tax policy is subsidizing Romney’s risk in his Bain investments.” In addition, in the 2010 return, Romney listed over $547,000 in business expense deductions based on his “active investor” status in the business partnership at Bain Capital. Remember that Romney insists he left Bain in 1999 and has taken no part in any management decisions. These deductions get written off at 35%.
Perhaps more galling are the dynastic trusts Romney has set up for his children, to shield his fortune from taxes:
Republican presidential candidate Mitt Romney and his wife, Ann, have used sophisticated estate- planning techniques for more than a decade to minimize taxes and amass at least $100 million for their family outside of their estate.
The couple created trusts as early as 1995, when Romney was building wealth as chief executive officer of Bain Capital LLC. They packed one for their children with investments that stood to appreciate and set up another for charity that provides a tax deduction and income. The candidate’s retirement account, valued at as much as $87.4 million, may benefit his heirs for decades.
“It’s beneficial for your kids and grandkids to push the money downstream,” said David Scott Sloan, chairman of the national private wealth services estate-planning practice at the law firm Holland & Knight LLP in Boston. “The Romneys appear to be doing things that are similar to what other high-net-worth families do.”
This is basically done to avoid the estate tax. The trust funds do get taxed at the lower capital gains rate, but they aren’t factored into the estate in later years.
None of this is particularly illegal, though it may skirt the lines. Rather, as in much of tax policy, the tragedy is what’s legal when you have a lot of money. In that sense, the Romney candidacy can be seen as quite instructive.





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Willard wants to be prez so he can pardon his own tax dodging.
How Willard can claim to be an active investor on one hand and a passive investor in a blind trust on the other is not reality and extremely dishonest.
Lets see the returns, 1 year does not cut it.
This article irresponsibly doesn’t mention the jobs that were created in designing, implementing and maintaining the tax avoidance schemes. Aren’t CPAs and J.D.s exactly the kind of high-value knowledge workers who government policy should be helping? Also, too, their gardeners and personal assistants. Think of it as a post-industrial industrial policy.
IIRC, Romney adviser Michele Davis is really tight with Hank Paulson.
Isn’t there a problem with claiming to have retired from bain while still being in charge? This whole thing is seems to be really revolving around romney not being able to come clean on anything in his life.
How anyone can feel that he is so clean in his life given the way he is actively/not actively running the company or investments is breathtaking.
Senate Leader Bill Frist had a funny charity that paid his campaign advisors tons of cash. The Moonies are more an anti Commie group than a religion, I would like a better look at the charities Mitt gives too.
Heck just how much cash do the Mormons or Catholics for that matter give to help the poor vs Missionary work/getting new suckers and of course lobbying against Gay’s, Women etc?
Can’t mention what we have no documentation of in total can we? Is the number of people fired greater than the number of people hired?
Do we give Mitt less credit for people hired at lower wages? Do we give Mitt credit for jobs created in China? In sweat shops around the world?
If Mitt wants to run on his record we need access to his record. Until we get it your the one being irresponsible.
Sorry a bit to harsh my bad.
Drip. Drip. Drip.
The Obama campaign has the full goods on Romney’s tax evasions, and they are going to ladle them out right down to Election Day.
It does two things for them: it reminds people how obscenely rich Romney is (McCain’s money came from his wife and was a pittance by comparison), and it reminds them that he is not very patriotic because he doesn’t bear his share of the nation’s burden. Romney’s comeback that it is patriotic not to pay taxes will strike a chord with the Republicans, but not with the unwashed majority. It is hard to strike a patriotic theme when you’ve run away from your duties (not to mention draft evasion).
I don’t care for the flag waving BS, so I wouldn’t even use the patriotic angle regarding Willard’s tax avoidance schemes. It’s self evident. Attack where people understand – in their wallets. When guys like him get away from paying, their share has to be picked up by the rest of us. If working class blue collar voters can’t get over their racial resentment and see Willard for the enemy that he is then I fear we are screwed for good.
My comment was not serious. I had hoped that, if nothing else,
the “Also, too” would make that clear. Sorry.
Every day, one by one, another person get the message. This man care only for himself and his family and wants to be king because, and I’m quoting here, “It’s his turn”.
Let’s all make sure he doesn’t get “his turn”.
The D of J should have started investigating him back in 2009.
We all knew that he would run for president in 2012 and most likely get the nomination.
They say he either lied to the SEC, which is a felony, or is lying to the American public. Well, if those are the only two possibilities, the D of J should be investigating the potential felony.
Bingo. The impression has been forming lately that that is the key to Willard; everything, all out, full-speed ahead for the family (and maybe for co-religionists),
Anybody not family…pffft! You’re nothing, worthless, no feeling for your hardships, you just don’t count.
There’s a sharp line between family and everybody else. I was listening to one of the apologists this morning talking about how he had to make himself more likable at the convention, and he would do that through showing his devotion to his family. I thought of the many pictures of the extended family…daughters-in-law, grandkids, etc. And I thought about how it feels to come into a family that has, say, Sunday dinner together every single Sunday, and vacations – like the Romneys – together every year.
and my reaction was claustrophobia.
A tight-knit family can be a blessing. It can also be a curse. So to me, this focus on family cuts both ways. I think it explains his total lack of empathy for ordinary folks. It’s simple; they/we are not family, ergo, not important in any significant way.
Only the little people pay taxes.
Does Mitt perhaps pay the larger share of care for other adult, dependent women, households and their offspring? Is it true that supporting others who are dependent on you can be written off IRS tax?
It’s how the Mormons do it, the result of which is an “Us against Them” relationship with the rest of society. Close-knit families with a close relationship with the LDS and with other members of the LDS, and cordial but not really warm friendships with the gentiles is typical. Then, you add the “class” and status within the church (Romney was a Bishop and those without a place in the upper hierarchy aren’t usually made Bishops) and it becomes clear that Romney isn’t your run-of-the-mill parishioner. Of course he cannot relate to ordinary gentiles, and he even has problems with ordinary Mormons. He is accustomed to wielding power, and his personality leaves little room for self-doubt or compromise. He likes to be in control and will do whatever necessary to gain that control. Once in control, he seems to be content to delegate authority and to sit back and watch the outcomes. If things do not happen the way he thinks they should, he “likes to fire people”. Many of us here are quite familiar with his management style–I call it “Benevolent Ruthlessness”. And that is why he needs to convince us that he is really a sweet and considerate everyman. Good luck with that.
But…but…but Willard really only has two suits.
The ‘Benevolent Ruthless’ and ‘Situational Ethics’ designs. And they fit him quite well.