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Sat Sep 22, 2012, 05:27 PM

Have you looked thru Mitt-Ann's tax returns? Being moderately poor

and with no capital gains or losses to have ever had to report, but as one who has always filed their own joint returns - even for a few years as a very small business owner - was curious to see what his looked like.

Wow! The number of pages for foreign investments. The P&L's from his "business" (Independent Artists Writers and Performers) - who knew? Oh yeah, he's a public speaker...remember the speach from the not-to-secret tapes?

Surely this Friday dump won't be the end of the questions about this candidates R MONEY, will it?

The Atlantic had a good read on it today. Here's some of it:

...(2) Romney's income mostly comes from investment funds located offshore. The tax returns of the rich are different from yours and mine. They mostly detail offshore investment holdings. As Zach Carter of the Huffington Post points out, 266 of the 379 pages of Romney's 2011 taxes are about foreign corporations and partnerships. Read that again. These funds are not set up overseas so that people like Mitt Romney can avoid taxes. These funds are set up overseas so that institutions like university endowments can avoid taxes.

Tax-exempt entities face a special tax called the unrelated business income tax (UBIT). When they own a part of a business, they have to pay UBIT on whatever income they get from it -- otherwise these businesses would have the competitive advantage of not having to pay taxes. That actually happened when some alums donated the Mueller Macaroni Company to NYU Law School back in 1948. What does this have to do with investment funds? Well, most funds -- including for private equity shops like Bain Capital -- are set up as distinct corporate entities. Big investors like university endowments would face the 35 percent UBIT on top of 15 percent capital gains taxes if these funds were set up in the United States. So they don't. They set them up in the Cayman Islands instead.


The biggest revelation here is that it's good to be rich. But we already knew that from Romney's 2010 tax return. As my colleague Derek Thompson points out, Romney benefits from the preferential taxation of capital gains, from the crazy loophole that lets him count more income as capital gains, and from the best accountant money can buy. There's nothing scandalous about this -- other than the system that makes it possible. Now, there are good arguments about efficiency for keeping capital gains taxes low, as Matt Yglesias of Slate points out. But there are also good arguments about equity for not letting the super-rich pay less in taxes than the middle class.

It's almost as if we should have an election about this.


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