Romney Says Corporations Familiar With ‘Low-Tax Havens’ – Businessweek
The newly released Bain records show that Romney took advantage of investments with the firm that achieved a low tax rate, for example, by engaging in what are known as management- fee conversions or fee waivers. Bain Capital Fund VII LP disclosed in a 2009 report that the general partner in the fund had in the past waived management fees and converted those fees into an interest in the fund called a “priority profit share.” That had the effect of turning fees that would be taxed at ordinary income rates, as high as 35 percent, into capital gains, taxed at a rate of 15 percent.
So by using this loophole he is essentially cutting his tax rate from 35% to 15%. A 20% reduction. Considering he made $20M last year, 15% is $3m. 35% is $7M. So he is getting a roughly $4m/yr tax loophole.
Multiple this by 10 years, and you find the $40M he used to run for President in 2008. You’ll also find that the U.S. ran a budget deficit this whole time, so a good portion of Mitt’s tax loophole money was replaced with borrowed from China money.
The thing about this is…it only takes 300,000 people paying that extra $4M/yr to make up our $1,200,000,000,000/yr deficit.
300,000,000 million people in the country, divided by 300,000…is the top 0.1%. I.e. the top 10% of the top 1%.
In 2005 (seven years ago), the top 0.1% averaged nearly $1.7M each.
So while closing this loophole doesn’t completely close our budget gap in and of itself, it closes a good portion of it…and does so in a responsible manner.
Right now we are borrowing from the wealthy to pay our bills rather than taxing them. The same folks are then turning around and using that money to “job create….” in the sense that Mitt Romney is using that money to run for President…again (he took the $17m he spent in 2008 as a loss on a personal loan to himself on his 2009 tax returns…one would assume…since he is hiding them and it makes sense to do so).
Far from being the petty thoughts of small minds, wondering how much folks like Mitt pay in taxes, and how they have avoided them in a very relevant discussion in 2012…at least if anyone knows how math works.