Republicans have sought this week to turn Mitt Romney's tenure as a Wall Street buyout specialist into a political asset, touting his record as the former head of investment firm Bain Capital. They've also spent the week championing the virtues of individual ambition and meritocratic achievement, proclaiming "We built this!" the theme of the convention.
But private equity firms like the one Romney led have benefited considerably from government subsidies, as the chart above demonstrates. Bain Capital benefited considerably from the tax code's preference and subsidy for debt-financed leveraged buyouts, as opposed to investments funded with equity.
According to data published by the White House in February, new investments funded with equity are taxed at an average effective rate of 36.8 percent. Investments funded by debt, however -- the types of investments private equity firms like Bain Capital specialize in -- receive a slight subsidy, of about four percent.
The tax code favors and encourages the use of debt, over equity, to finance investments. And Mitt Romney made considerable use of that particular tax anomaly as the head of private equity firm Bain Capital.
Sal Gentile (@salgentile) is a segment & digital producer for Up w/ Chris Hayes .
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I guess, since Mitt broke all those tax laws, the IRS will have the cops waiting to arrest him, right after he's done speaking at the convention.
Give me a break!
Sounds like msnbc is trying to say; If the speed limit is 55mph, and a person goes 55mph, they are a bad person.
Mitt didn't make the tax laws. They have been made by the Obama administration, and all the ones before him. We can't fault someone following the law.
Come on people, wake up!!!!!!!!
If a law was broken, let's see it spelled out.
I do not see anything in the above commentary that implies that Romney broke any laws. I do believe that they demonstrate the negative impact of lobbying to generate the creation of these breaks in the Tax Code.
I agee that the loop holes should be closed. But, the information presented here is not talking about closing the loop holes. The statements here are designed to mislead people into thinking that Mr. Romney is dishonest because he used the law in his favor.
Why not say;
Tax laws allow investment firms to pay taxes at a lower rate, because of subsidies that they receive.
Do any of us truly beleive that others, including many high ranking democrats, don't benefited from these laws as well? I beleive that Sal Gentile would want us all to beleive this.
What the above charts show is that those in the upper one percent live in a totally different world with different rules, different laws, and different kinds of numbers. None of this is particularly new or startling. What needs to happen is that more of what is earned at the top needs to be reinvested in the Main Street economy in the form of human capital investments, infrastructure, and adequate investments in a social safety net. We can get adequate funding for many of our needs in green energy, infrastructure, and new types of transportation system such as bullet trains by forming new types of innovative public-private corporations. Bonds can be sold by these corporations for necessary projects such as a German or French state of the art bullet trains. The government gives some seed money while private investments with guaranteed bond interest by the government encourages investments in the public-private corporation. This approach was done to pay for much of the Atlanta Olympics with only marginal tax increase for people who lived in Atlanta. Mayor Andrew Young was on NPR talking about all of this about two weeks ago. Here is a youtube video where Andrew Young talks about building projects. These types of projects are how things can get done with innovative leadership and new types of thinking.
"...//www.youtube.com/watch?v=oVlimQOvNfE"
He did not do anything illegal. However, this is how a really wealthy people and their friends can get together to influence politicians to write the tax code in a manner that will enable them to make more at the expense of the country. That is why he can't and won't release his tax returns. If you have the money and connections to buy influence in Washington then you can get the code written to your liking. Just ask JPMorgan as it is their lawyer that writes the code that the rest of us have to live by.
Republicans want laws about voter ID but require so little of requirements to become President of our Country. Romney may not have broken the law but at least 10 years of his Tax returns would tell us a great deal about his integrity and values. What's he hiding?
Just some Possible Ideas Residency issue's with the Mass. Gov race, apparantly not to forthcoming with all the document's requested, Profit's from the Olympic games, Bain owned sponorship's, Tax Amnesty 2009, Failure to report Swiss bank Acct's, Might have avoided Prosecution, But NOT the Fines, Is he still profiting From Stericycle? These are a few thing's that could be answered.
Republicans are trying to suppress the vote with requirements yet ask so little of a Presidential candidate. Romney may not have broken the law but at least 10 years of tax returns would tell us so much about his values and integrity.
The 1% has been using government to get rich in many more ways than this. David Cay Johnston wrote a book, Free Lunch, which is a good starting point. David Brooks wrote an essay in the NYT today talking about "hyperindividualism" of the Republican party. But there has been something going on for 30-40 years which nobody talks about. When I was a child, if a business wanted to build a sports stadium (for example) it was assumed that the businessmen would go to the local bank and get a loan (with simple interest) and incorporate those costs into its business plan. It never occurred to anyone that government might be involved in that.
Today, every business in America goes to government first. They claim that they cannot build a building, hire a worker, or do just about ANYTHING without some sort of government help. So government money builds the physical asset, the ownership of that asset goes into private hands. This process does not stop there.
When I was a child, it was assumed that if a business wanted workers with a specialized skill set, that business would hire someone with a basic liberal-arts education (which taught things like ETHICS) and then that business would pay to train that worker in the specialized skills needed. Somewhere in the last 40 years, businesses got to transfer that obligation onto the shoulders of government. Suddenly they "couldn't afford" to train the workers, the workers had to come "already trained."
Socialst and Communist countries have NO PROBLEM paying for the COMPLETE education of their workers. We stop a high school, and then throw the burden onto the shoulders of parents. A comparison could be made here with Olympic athletes. If the prohibition against "professionalism" had not been rescinded and Corporations could not be relied upon to finance elite Olympic training, China and other socialist countries would have surpassed us long ago. Why? Because the cost of bringing an Olympic athlete "to market" is borne by the state in China, while it is a burden carried solely by the parents in the United States.
A similar process has been going on in the field of healthcare. The game for insurance companies, for years, has been to cherry-pick. A similar process has been going on in Agriculture. Insurance companies have succeeded in transferring all the risk onto the shoulders of government while guaranteeing fat profits for themselves.
When corporations are allowed to pay ZERO taxes, they have effectively trasferred 100% of the risk of doing business onto the shoulders of the middle-class taxpayer. And then they go to the Republican Convention and tell middle-class people that the evil ones are the people of color who would be starving and dying in the streets if there were no safety net.
And nobody seems to see what is going on.
I forgot to add that the other way in which Republicans want to fleece America is by charging more for things that, at one time, were seen as the commons. Air, water, electricity, national parks. By "privatizing" these essentials, which used to be understood as belonging equally to everyone, Republicans will be able to "tax" ordinary Americans without calling it a "tax." Wait until these things are in the hands of monopolies. Privatizing ANYTHING does not "save money." It simply takes it off the government balance sheet and removes it from public view and public accountability. This is the equivalent of giving Yosemite to a private individual and telling them they can do anything they want with it. All the lumber would be gone very quickly and, sorry, there's nothing you can do about that now.