Mitt Romney’s DIRTY TAX SECRET

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"......for those who wish for intricate detail on this tax avoidance mechanism they can refer to this paper from Gregg Polsky of the University of North Carolina. But, the simple explanation of this from Professor Fleischer is:

There are many variations on the theme, but here’s how many deals worked: each year, before the annual management fee comes due, the fund manager waives the management fee in exchange for a priority allocation of future profits. There is minimal economic risk involved; as long as the fund, at some point, has a profitable quarter, the managers get paid. (If the managers don’t foresee any future profits, they won’t waive the fees, and they will take cash instead.) In exchange for a minimal amount of economic risk, the tax benefit is enormous: the compensation is transformed from ordinary income (taxed at 35%) into capital gain (taxed at 15%). Because the management fees for a large private equity fund can be ten or twenty million per year, the tax dodge can literally save millions in taxes every year.



The problem is that it is not legal.


http://victorfleischer.com/archives/306

He then began studying a single fund, to give a solid example. The fund he chose was the Bain Capital Fund VII LP, one of the funds set up under Romney’s tenure at Bain (and was in fact listed as the managing director of in the SEC filings in 2002), which the family still has a sizable holding of. In this one fund of multiple which Romney holds, the total management fee conversion came to about $7 million, in one year alone. And this was not the most outrageous example, with Bain Capital Fund X LP being able to skip out on paying $67 million in taxes in 2009 alone.




Now, as Romney retroactively retired to 1999, the case will be argued that he just benefits from the funds as any other investment. However, Romney filed an 83(b) election on his taxes, often times used for just this form of tax avoidance. It is putting him as a general partner, not a limited partner, with active access to the assets and some control over the investment. Even if however he did operate as a limited partner, his fund profited directly from just this arrangement, which means he profited. Since over 80% of his income came from these funds, that means 80% of his income was not taxed properly, in an illegal manner.



It looks as if Mr Romney may indeed be in hot water over his taxes after all.




cont'

http://www.addictinginfo.org/2012/08/25/romney-tax-secret/



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[KaryninMiami]

1. Only if some one or some entity does something about it very quickly.

And if the MSM reports it- and the Dems or Blue team PACs start using it in their communications. If not- it's really not going to make a damn bit of difference. People hate President Obama in greater numbers then the ones that care about Romeny's money situation. And most aren't even paying attention yet- not really.

[renate]

2. but not before the nomination....

I don't think the MSM will necessarily investigate Mitt's Gordian knot of taxes independently, but I do think they will report it as long as they can get experts to explain it to them and to us--it's too juicy. This is going to be fun!

[NRaleighLiberal]

3. I tweeted the link to Axelrod, though I suspect they are on top of this stuff (or are they??)

[Amonester]

4. They probably are, but keeping it for that 'special' October...

Surprise in case Robmehood/Rayn get the nomination (which seems to be in the bag).

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5. I won't be the least surprised if another Romney ' DocumentDump ' occurs by September.

Hours before their first debate would be perfect. No time for Mitt to cover up or prepare a response.

[Amonester]

7. Can't wait for that first debate! :)

DocuDump or not!

[geckosfeet]

6. Well no kidding. If he was honest about his taxes he would disclosed them years ago.

[NBachers]

8. Calling Eric Holder! Calling Eric Holder! Has anyone seen Attorney General Eric Holder?

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9. If Eric Holder stepped in now, the rethugs would be screaming foul charging political partisanship

and expeditiously move to have Holder impeached.

Now, if Reid's ' source ' decided to come forward and expose Romney publicly by confirming Reid's tax charges, Romney & His Boy's race would be effectively over. Don't hold your breath on such happening any time soon.