Forgot Password
Pentax Camera Forums Home
 

Reply
Show Printable Version Search this Thread
09-21-2012, 12:44 PM   #1
Veteran Member
jeffkrol's Avatar

Join Date: Sep 2006
Location: Wisconsin USA
Photos: Gallery
Posts: 8,434
I pay all the taxes that are legally required and not a dollar more,

My empathy gene is kicking in.. hard to criticize someone for paying more tax than he owes.............

Naaaaaaa.........................

QuoteQuote:
Let’s review: In 2011, Romney earned $14 million, mostly from investments that are taxed at a lower, preferential rate. He also gave a large amount of money to charity—more than $4 million. So, thanks to the charitable deduction in the tax code, he was technically allowed to reduce the amount of income subject to the income tax even further.

The trouble is, if Romney did that, he would have ended up paying less than 13 percent of his income in federal taxes (the true amount would have likely been somewhere between 9 to 11 percent). That would have conflicted with his statement in August that he has paid at least 13 percent the past ten years. So Romney opted to limit his charitable deduction to just $2.25 million, essentially agreeing to pay the government more in taxes than he needed to. In the end, Romney had an effective federal tax rate of 14.1 percent.

There’s nothing wrong with voluntarily donating a bit more to reduce the federal deficit. Although there is this awkward quote from Romney during a primary debate in January: “I pay all the taxes that are legally required and not a dollar more,” he said. “I don’t think you want someone as the candidate for president who pays more taxes than he owes.”
http://www.washingtonpost.com/blogs/ezra-klein/wp/2012/09/21/mitt-romney-is-...much-in-taxes/

What a .............................

QuoteQuote:
the true amount would have likely been somewhere between 9 to 11 percent


09-21-2012, 12:50 PM   #2
Veteran Member
Nesster's Avatar

Join Date: Oct 2006
Location: NJ USA
Photos: Gallery
Posts: 13,056
What Matters in Romney's Tax Memo - Derek Thompson - The Atlantic

What's Really Going on With Mitt Romney's $102 Million IRA - William D. Cohan - The Atlantic

QuoteQuote:
But the Romney IRA has him stumped. "If you say to your tax people," Rattner told Fareed Zakaria about Romney in a late JUly edition of GPS, "as he seems to have done: 'I want every trick in the book. I want to push this to the edge,' I will tell you that, as a private-equity guy, I'm familiar with many of the things that he did and I know many people who've done many of the things that he did. I do not know anyone who did everything that he did and some of what he did -- like the IRA -- I've asked fellow private-equity guys, none of us had even known this was a possible 'trick' if you will. So he's pushed the envelope all the way to the edge to his benefit and I think Americans would find that very distasteful."

I have also wondered how Romney did it, and after Rattner remarks, determined once and for all to get to the bottom of this mystery: How can an individual retirement account that was limited by law to annual contributions of at most $30,000 grow into a fund with more than $100 million in it?

This is not something your average American can do, and not only because the average American in not likely to have Romney's investing prowess or his ability to hire people with exceptional investing skills.

The truth about Romney's IRA is that its massive size has very little to do with choosing the right investments and a lot more to do with the alchemy of the private-equity business itself and the opportunities that come out of that insular world for people like Romney, who was the founder and chief executive of Bain Capital for at least 15 years.

If we stipulate that when he was at Bain from 1984 to 1999, Romney put the maximum $30,000 a year into his so-called SEP-IRA, then as a baseline his IRA should have had a value of $450,000 by the time he left to run the Salt Lake City Olympic Games. If he was a talented investor and his IRA grew tenfold -- something not many people can achieve -- his IRA would be have been worth $4.5 million, a far cry indeed from the upper range of $102 million he says it is worth. (The lower range Romney put for disclosure purposes on his IRA was $20 million.)

So how did Romney do it? According to the private-equity executives I talked to, the secret is likely in the compensation arrangement the industry has cut with its well-heeled investors. In private-equity land, the general partners of, say, Bain Capital -- people like Mitt Romney and his cohort of 30 or so well-heeled Harvard MBAs who invest the limited partners' capital -- get what is called "carried interest," or 20 percent of the profits on deals, while putting up only a fraction of the equity needed to do a buyout. It's akin to getting "sweat equity," only with very little sweat. "Your carry is basically buying stock for five cents that other people have paid $1.10 for," explained one partner in a private-equity firm.

Here's how it works: In rough terms, if, say $100 million is needed for the equity account of a $500 million buyout of a company -- a typical buyout ratio of equity-to-debt -- Bain's limited partners -- essentially wealthy investors in its funds -- would put up $99 million of the $100 million. The Bain general partners -- like Romney -- would put up the $1 million balance. In return for that $1 million, instead of getting 1 percent of the equity ownership of the purchased company, they would get 20 percent of the upside. So even though the math would dictate only a 1 percent ownership stake, the Bain guys, like others in the industry, would get a 20 percent stake in deals despite putting up very little money. (Actually, over time, Bain's investors agreed to give the Bain partners 30 percent of the upside in some of their funds, but that's a different story.)

Since Romney was the founder of Bain Capital, it would not be at all unusual for him to take something like a third of the partnership's "carried interest" for himself. So of the 20 percent stake that the Bain partners would keep, it is likely Romney, as the founder, would get at least a third of it -- in every deal during his 15 years at the helm. And this is where the calculus for Romney begins to get very interesting, especially if he used his IRA to invest in these buyouts.

Michele Davis, a Romney campaign aide brought on to defend his record at Bain, declined to get into specifics when asked about the IRA. "Mitt Romney has been scrupulous about observing the requirements of the tax code," she said. "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. The IRA, like all IRAs, is tax deferred and Governor Romney will pay taxes on those funds when they withdraw the funds."

The private equity partners I spoke with laid out what they see as the most probable scenario explaining the growth of his IRA: When it came time for Romney to invest his portion of the $1 million needed (in our hypothetical example) for a Bain leveraged-buyout, instead of using money in his bank account, he used the money -- the $30,000 -- he had put in his IRA. Where once he had $30,000 in cash in his IRA, now he would have had something he valued at $30,000 but that was really his portion of the "carried interest" in the deal; if the deal worked out, the IRA could quickly be worth a lot more than $30,000.

For instance, in the hypothetical $500 million deal, with $100 million of equity, say that company did nicely and Bain sold it for $1 billion after a few years. The $400 million of debt on the company would be paid, leaving $600 million in profit for the Bain investors who put up the $100 million in equity. By the terms of the agreement between the Bain general partners and the Bain limited partners, the Bain general partners would take 20 pecent of that profit, or $120 million, leaving $480 million for the limited partners. By Romney's agreement with the other Bain guys, he would take one-third of the $120 million, or $40 million himself.

And voila, his initial $30,000 in his IRA would now be worth $40 million from one successful deal. The good news is that he could then use the $40 million in the IRA, add $30,000 each year to it, and continue to invest in one Bain Capital deal after another. In short order, his IRA could be crackling with the up to $102 million he says is in it.
HOWEVER

QuoteQuote:
The bad news for Romney is that while the contents of an IRA can compound year after year on a tax-deferred basis, money cannot be withdrawn penalty-free from the IRA until the owner of the account is 59 and a half years old. The IRA is required to be withdrawn -- and the long-deferred taxes paid -- on an annual basis starting at age 70.

Most private-equity guys like to spend the money they get from investing in deals on toys such as vacation homes, private jets, boats, and mansions. Romney has many of these things, but he obviously had sufficient money from other sources -- inheritance, maybe? -- to pay for them, since he could not use any of the accumulated $102 million in his IRA without suffering a huge penalty. "You wouldn't put your whole investment in unless you were already loaded," one private-equity partner told me.

Worse, other private-equity moguls say -- and this is the thing that has them really scratching their collective heads -- is that when Romney is forced to start taking withdrawals from the IRA in five years, when he reaches 70 years old, he will have to pay ordinary income-tax rates on the withdrawals. (At the moment the federal tax rate is 35 percent; if Obama is reelected it could increase to 39.6 percent). Had Romney used money in his checking account to invest in the Bain deals, instead of using his IRA, he could have simply paid capital-gains rates -- 15 percent -- on the profits, instead of the higher 35 percent rate. Since some huge capital gains are at stake here, that 20-percentage-point differential can add up to huge additional taxes that Romney will have to pay but could have avoided with a more conventional investment strategy. "It's a tremendous bet that you can make more paying 35 percent on it than you would if you just extracted it out and paid 15 percent," said one incredulous private-equity partner.

Added Robert Willens, a well-known tax adviser around Wall Street, "This is very unconventional tax-planning and not something I would recommend doing. Not that he asked me." He said he would never advise anyone who can get capital-gains treatment on an investment to put it in an IRA that is taxed at ordinary-income rates, even if there were enough of a time period of interest compounding tax-free to make it conceivable.

Rattner is not alone in the private-equity world in wondering what would motivate Romney to make this decision. Many in the industry seemed stumped. I spoke to a number of partners of private-equity firms about Romney's IRA and the typical response was something like this, which came from a partner at one of the larger firms after speaking with his internal tax expert: "He doesn't know anyone else who's ever done that, certainly no one here. These tax guys talk to each other. They're all friends. He's not aware of anyone else that would've done that, and frankly, does not understand why he did it. So if he's discovered a loophole, no one else can figure it out."
09-21-2012, 01:06 PM   #3
Veteran Member
jeffkrol's Avatar

Join Date: Sep 2006
Location: Wisconsin USA
Photos: Gallery
Posts: 8,434
Original Poster
Thus his self serving tax relief on the wealthy.
09-21-2012, 01:10 PM   #4
Inactive Account




Join Date: Apr 2010
Location: New Orleans
Photos: Gallery
Posts: 3,053
If he loses, I am sure he will amend his return next year and recover that overpayment.

09-21-2012, 01:19 PM   #5
Veteran Member
jeffkrol's Avatar

Join Date: Sep 2006
Location: Wisconsin USA
Photos: Gallery
Posts: 8,434
Original Poster
QuoteOriginally posted by mikemike Quote
If he loses, I am sure he will amend his return next year and recover that overpayment.
THANKS for the reminder... funny isn't it............I believe he has 5 (or 7) years..



Sooo which demographic would this appeal too????

http://www.mittromney.com/blogs/mitts-view/2012/09/note-trustee-brad-malt

QuoteQuote:
The Romneys thus limited their deduction of charitable contributions to conform to the Governor's statement in August, based upon the January estimate of income, that he paid at least 13% in income taxes in each of the last 10 years.
????????????????
QuoteQuote:
2:24 pm
by Sara Murray
Add a Comment

Mr. Romney made a similar statement in an NBC News debate during the GOP primaries.

“I pay all the taxes that are legally required and not a dollar more,” he said at the time. “I don`t think you want someone as the candidate for president who pays more taxes than he owes.”

2:24 pm
by Sara Murray
Add a Comment

Interesting observation: Mitt Romney paid more in taxes than he was legally required to in 2011 – something he once said would disqualify him for the presidency.

“I've paid all the taxes required by law,” Mr. Romney said in an interview with ABC News in July. “I don't pay more than are legally due and frankly if I had paid more than are legally due I don't think I'd be qualified to become president. I'd think people would want me to follow the law and pay only what the tax code requires.”

2:22 pm
by Tim Hanrahan
Add a Comment

The site is now working, and most of the documents are coming available. http://www.mittromney.com/disclosure
http://blogs.wsj.com/washwire/2012/09/21/live-audit-the-romney-tax-documents/

seems his wife has 2 dancing ponys...................
http://www.washingtonpost.com/blogs/right-turn/post/friday-antics-romneys-ta...7738_blog.html
QuoteQuote:
Are these the causes that are a reflection of you and your values? Do they show Romney, as president, would champion the social issues and causes that matter most to you and average America?

• The US Equestrian Team Foundation
• Citizens for Limited Taxation
• The Friends of George W. Bush Library
• The Heritage Foundation
• The Harvard Business School
• Homes for Our Troops
• The Mormon Church
• The Becket Fund
• The Center for Treatment of Pediatric MS
• The Federalist Society

Last edited by jeffkrol; 09-21-2012 at 02:23 PM.
09-22-2012, 06:49 AM   #6
Veteran Member
GeneV's Avatar

Join Date: Oct 2008
Location: Albuquerque NM
Photos: Albums
Posts: 9,829
The attempt to rebut his tax avoidance by having Price Waterhouse issue a statement about his "average" rate over 20 years is lame to the max. It says nothing about whether there was an extended period where he paid little or nothing. He could have one year in the 90s where his income was $50,000 (due to posting losses and claiming deductions) and his tax rate was 39%, and that cancels out several more years in the next decade when his income is $20,000,000 and his tax rate is far less. to get an average of around 20%. He might, by taking deductions and paper losses to get his income down to only $50,000, be effectively paying almost no tax on his real income.

In classic Romney, the year where he actually shafts the government the most could be a year which increases his effective rate. Just release the returns.

Last edited by GeneV; 09-22-2012 at 07:04 AM.
09-22-2012, 08:47 AM   #7
Loyal Site Supporter
Loyal Site Supporter
boriscleto's Avatar

Join Date: Dec 2009
Location: North Syracuse, NY
Photos: Gallery
Posts: 15,369
Daily Kos: Romney is probably a MULTI-BILLIONAIRE

QuoteQuote:
There are many examples of multi-billionares who are have gotten wealthy this way. I stopped counting at 3.2 billion. Makes you wonder why Romney is so "poor" in comparison.
09-22-2012, 09:01 AM   #8
Veteran Member




Join Date: Jun 2008
Location: Flyover America
Posts: 4,469
QuoteOriginally posted by jeffkrol Quote
I pay all the taxes that are legally required and not a dollar more,
Translation:

My relationship to government is totally amoral and has no moral dimension whatsoever therefore what I pay or do not pay is governed only by necessity.

Might makes right.

09-22-2012, 10:35 AM   #9
Veteran Member




Join Date: Jan 2010
Posts: 773
QuoteOriginally posted by wildman Quote
Translation:

My relationship to government is totally amoral and has no moral dimension whatsoever therefore what I pay or do not pay is governed only by necessity.

Might makes right.
Absolutely correct translation!

In other words:

"I only pay taxes because I have no choice, I do not agree with the concept of taxes and if I also had the means to "shelter" in other countries so that I reduced my liability to zero I would do so immediately. In short I wish I was like GE last year and pay zero taxes - only a fool agrees with taxation!"
09-22-2012, 10:38 AM   #10
Pentaxian
Na Horuk's Avatar

Join Date: Feb 2012
Location: Slovenia, probably
Photos: Gallery | Albums
Posts: 11,183
He paid more than he had to, just to not cause a conflict with things he said? Well, considering he already used millions of his own money in this campaign, this is a small expense for him. But he really is a total etch a sketch. I would love to see him elected and then square off against other world leaders. I can just imagine a meeting between Romney and Putin.
09-22-2012, 11:09 AM   #11
Veteran Member
jeffkrol's Avatar

Join Date: Sep 2006
Location: Wisconsin USA
Photos: Gallery
Posts: 8,434
Original Poster
QuoteOriginally posted by GeneV Quote
The attempt to rebut his tax avoidance by having Price Waterhouse issue a statement about his "average" rate over 20 years is lame to the max. It says nothing about whether there was an extended period where he paid little or nothing. He could have one year in the 90s where his income was $50,000 (due to posting losses and claiming deductions) and his tax rate was 39%, and that cancels out several more years in the next decade when his income is $20,000,000 and his tax rate is far less. to get an average of around 20%. He might, by taking deductions and paper losses to get his income down to only $50,000, be effectively paying almost no tax on his real income.

In classic Romney, the year where he actually shafts the government the most could be a year which increases his effective rate. Just release the returns.
QuoteQuote:
Former Ohio Gov. Ted Strickland, the Obama campaign co-chairman who lit up the Democratic National Convention with attacks on Romney’s overseas investments, said the PWC summary only highlights that “there’s so much it doesn’t tell us.”

“It just raises further questions and makes it reasonable for people to ask, what is he hiding?” Strickland said. “If we had the answer to that question, he would not have a snowball’s chance in hell of being elected president. And that’s not off the record.”

Said Strickland: “Mitt Romney releasing his tax summary Cliff’s Notes and expecting us to really understand his tax situation, how much he paid, when he paid them, under what conditions, would be like someone who went to see ‘Abraham Lincoln: Vampire Hunter’ thinking they understood the meaning of the Civil War.”

Jim Jordan, a Democratic strategist, said that “breathing new life into an issue that had pretty much disappeared seems pretty bizarre. Presumably, their polling shows that Romney’s obsession with secrecy is a growing problem and they’re worried about how Obama might use it during debates. Another inexplicable move by a clumsy candidate.”
Read more: Mitt Romney's tax release puzzles strategists - Maggie Haberman and Alexander Burns - POLITICO.com
AN interesting and often missed take on taxes.............

QuoteQuote:
There's actually a third aspect of the two-step as well, but I'm not sure it qualifies as an entire two-step of its own. Let's call it two-step two, chutzpah style. Here's the thing: the effects of income tax in discouraging work are far stronger at the low end of the income spectrum than at the high end. The logic behind the flat personal exemptions in the tax code, and behind the earned-income tax credit, is that you end up with huge numbers of otherwise-dependent poor people entering the labour force and working productively if you tip the scales in their benefit. That's why the Clinton administration expanded the EITC, and it's been very successful. But the genius of the "they-don't-pay-income-taxes" complaint is that it takes the tax cuts that were implemented in order to get poor people off of welfare and encourage them to work, and uses them to accuse poor people of being shiftless and dependent on government. This creates a sort of permanent resentment machine, a renewable fuel source for class warfare of the rich against the poor.
http://www.economist.com/blogs/democracyinamerica/2012/09/mitt-romney-and-ta...6d37c30b6f1709

Last edited by jeffkrol; 09-22-2012 at 12:15 PM.
09-22-2012, 12:36 PM   #12
Veteran Member




Join Date: Jun 2008
Location: Flyover America
Posts: 4,469
QuoteOriginally posted by Na Horuk Quote
I can just imagine a meeting between Romney and Putin.
It would be a meeting between the fly and the flyswatter.
09-22-2012, 05:55 PM   #13
Loyal Site Supporter
Loyal Site Supporter
boriscleto's Avatar

Join Date: Dec 2009
Location: North Syracuse, NY
Photos: Gallery
Posts: 15,369
Daily Kos: Romney Lawyer Admits They Manipulated Taxes to Conform to 13% Claim
Reply

Bookmarks
  • Submit Thread to Facebook Facebook
  • Submit Thread to Twitter Twitter
  • Submit Thread to Digg Digg
Tags - Make this thread easier to find by adding keywords to it!
amount, deduction, dollar, income, million, percent, rate, romney, tax, taxes
Thread Tools Search this Thread
Search this Thread:

Advanced Search


Similar Threads
Thread Thread Starter Forum Replies Last Post
the four guns purchased legally at Gander Mountain Guns and Bass Pro Shops jogiba General Talk 577 08-20-2012 08:54 AM
Patriotic Millionaires want to pay more taxes jogiba General Talk 24 07-27-2011 01:35 PM
What and where and whom can you legally photograph? grhazelton Photographic Industry and Professionals 37 07-06-2011 06:23 AM
taxes and spending Nesster General Talk 5 10-21-2010 02:24 PM
Just out Im legally Blind Silly Goose General Talk 7 11-18-2009 08:55 AM



All times are GMT -7. The time now is 08:29 AM. | See also: NikonForums.com, CanonForums.com part of our network of photo forums!
  • Red (Default)
  • Green
  • Gray
  • Dark
  • Dark Yellow
  • Dark Blue
  • Old Red
  • Old Green
  • Old Gray
  • Dial-Up Style
Hello! It's great to see you back on the forum! Have you considered joining the community?
register
Creating a FREE ACCOUNT takes under a minute, removes ads, and lets you post! [Dismiss]
Top