Lid blowing off Romney tax secrecy
by Kenneth Thomas
Gawker (via Eman at Daily Kos) dropped a bombshell Thursday when it released over 950 pages of confidential documents from 21 Bain Capital-related investment vehicles, all of which Mitt or Ann Romney invested in. It made all 48 documents into a single searchable one here so that others could take a look and see what nuggets it might contain.
Romney previously claimed that his Cayman Island funds had to be located there in order to attract foreign investors, who invested via the Caymans so they would not be subject to U.S. taxes on their earnings, and that he did not reduce his tax bill as a result of his Cayman holdings. The newly released documents confirm that among these 21 funds, two set up a total of five so-called "blocker corporations" which allow U.S. non-profit entities to legally pretend to be foreign (i.e., Cayman) corporations in order to avoid the 35% "unrelated business income tax, which was created to prevent nonprofit groups from undertaking profit-making ventures that compete with taxpaying companies," as the New York Times reports. The still-unanswered question is whether Romney's huge 401-k, valued between $20 million and $102 million on financial disclosure forms, is one of the entities that invested in a blocker corporation, which would then refute Romney's assertion that his Cayman investments had not reduced his tax.
The two Bain funds with blocker corporations are Bain Capital Asia Fund LP (mentioned in the Times article; 3blockers) and Bain Capital IX Coinvestment Fund (2 blockers).
A second issue that has been raised is that various Bain entities converted management fees to carried interest (via Ryan Grim). While people know that the carried interest loophole (which makes management compensation into capital gains) exists and is legal, the issue raised by Professor Victor Fleischer of University of Colorado Law School is that private equity firms have come up with a way to make fees that are unarguably management fees subject to ordinary income (35% tax) into capital gains (15% tax) by "waiving" the fees in exchange for virtually certain future profit, so that the extremely slight economic risk is disproportionately small compared to the tax gain. Fleischer argues that this is flat out illegal and concludes: "Mitt Romney has not paid all the taxes required under law." Not all experts agree. We can look forward to more argument on this issue in coming days. Even if it is legal, it is morally even less defensible than the carried interest loophole.
In the end, we are still left with the fact that the tax system for the 1% is different from that for the rest of us. Whether Romney releases more tax returns or not, that issue is not going away. And the drip, drip, drip of new information makes me think he will eventually cave in.
http://www.dailykos.com/story/2012/08/25/1124179/-Lid-blowing-off-Romney-tax-secrecy
Gawker Posts 950 Pages Of Bain Documents (updated 2x)
http://www.democraticunderground.com/10021186310
“If challenged in court, Bain would lose."
http://www.democraticunderground.com/10021189869
= new reply since forum marked as read
phosphorus would be good.
I thought so 
group, maybe? 
Spill yer guts Mitts!
...Believe in America = tax evasion.
[font size=21pt]RMONEY[/font]
[font size=21pt]BELIEVES IN TAX EVASION![/font]
... the ins and outs of this explanation seem a bit impenetrable to me. The bulk of Romney supporters are going to hear this (if at all) like it's just a trumped up, meaningless, esoteric accusation. And even if they do get wind of it, they'll still be thinking, "What's the big deal? He made money, he did it legally, and he's going to do the same for me and the country. Yeee-hawww!!"
Well, that's my concern anyway. The true believers aren't going to see this for what it really is: greed, selfishness, and moral bankruptcy. Instead, they'll believe (and it will be reinforced by talk radio) that none of it matters. So even if the wheels fall off Romney's campaign car, he'll always have a rabid pit crew trying to keep it going.
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