Third (ABC) Party investigating Romney

[ONEBIGDADDY]

Nice Article on how to avoid paying taxes...Its a nice interesting read...OBD


http://abcnews.go.com/Blotter/bain-documents-romney-offshore-investments-blockers-avoid-taxes/story?id=17067015

[ONEBIGDADDY]

I really thought it was a good read how the rich get to cheat and then complain about they don't want to pay their fair share...What a joke to try to spoon feed the normal American citizens...OBD

[Durango 95]

I think "the rich" define their fair-share differently then you and others, might.

[spartan]

I think it a tad hypocritical that a US Company that incorporates itself Cayman Islands writes a critical piece on a person who has bank accounts in the Cayman Islands.

[spartan]

I think "the rich" define their fair-share differently then you and others, might.

You might be right, but until someone actually defines what "fair share" is, it's a sound bite which shouldn't be taken seriously rather than an argument.

[Durango 95]

I think "the rich" define their fair-share differently then you and others, might.

......until someone actually defines what "fair share" is, it's a sound bite which shouldn't be taken seriously rather than an argument.

That's pretty much right.....it can't be defined.

Because fair-share is a subjective interpretation by definition it's effectively impossible to establish a working common ground.

[Durango 95]

I think it a tad hypocritical that a US Company that incorporates itself Cayman Islands writes a critical piece on a person who has bank accounts in the Cayman Islands.

Yea.....What ever happened to honor among thieves?!  Ahhh...the good old days.

Seriously though, after thinking about it, I am NOT going to vote ABC News for president.

 

[John Galt?]

First, those "tax shelters" Romeny has are used to reduce/avoid taxes on money he had already paid taxes on.

For instance, Romney earns $10 million in 2005 and he maxes his 401k out at $15,000 so he pays full taxes on $9,985,000 which is about $2.8 million. He is left with $7.2 mill which he transfers to Caymens, where he can avoid taxes on interest and cap gains that the money invested might make. So he isn't avoiding taxes, he is avoiding double taxation.

Second, Romney himself has repeatedly proposed CLOSING the loop holes he is using. He is SPEAKING FROM PERSONAL EXPERIENCE that by having high marginal taxes and allowing off-shore loopholes, people will move money off shore to avoid taxes.

IOW, Romney is saying "We need to reform the tax code because I DO IT so I know others do it"

I don't see the problem.

[shadowhawk2020]

First, those "tax shelters" Romeny has are used to reduce/avoid taxes on money he had already paid taxes on.

For instance, Romney earns $10 million in 2005 and he maxes his 401k out at $15,000 so he pays full taxes on $9,985,000 which is about $2.8 million. He is left with $7.2 mill which he transfers to Caymens, where he can avoid taxes on interest and cap gains that the money invested might make. So he isn't avoiding taxes, he is avoiding double taxation.

Second, Romney himself has repeatedly proposed CLOSING the loop holes he is using. He is SPEAKING FROM PERSONAL EXPERIENCE that by having high marginal taxes and allowing off-shore loopholes, people will move money off shore to avoid taxes.

IOW, Romney is saying "We need to reform the tax code because I DO IT so I know others do it"

I don't see the problem.

If he left the 7.2 here and made say 800k in profit on investments would he pay tax on the 8 million, or just on the new 800k?

[John Galt?]

First, those "tax shelters" Romeny has are used to reduce/avoid taxes on money he had already paid taxes on.

For instance, Romney earns $10 million in 2005 and he maxes his 401k out at $15,000 so he pays full taxes on $9,985,000 which is about $2.8 million. He is left with $7.2 mill which he transfers to Caymens, where he can avoid taxes on interest and cap gains that the money invested might make. So he isn't avoiding taxes, he is avoiding double taxation.

Second, Romney himself has repeatedly proposed CLOSING the loop holes he is using. He is SPEAKING FROM PERSONAL EXPERIENCE that by having high marginal taxes and allowing off-shore loopholes, people will move money off shore to avoid taxes.

IOW, Romney is saying "We need to reform the tax code because I DO IT so I know others do it"

I don't see the problem.

If he left the 7.2 here and made say 800k in profit on investments would he pay tax on the 8 million, or just on the new 800k?

IF he put the money in a 401k, he would not pay on cap gains or interest but would pay on every dime he pulls out after retirement.

IF he just put it in a regular account he would pay on the gains + interest which right now is 35% on short term CGs and 15% on long term CGs and interest at 35%. So if half of the $800k was LT the other ST and interest, he'd pay $200k

Would you move your money offshore to save $200k/year??

[shadowhawk2020]

First, those "tax shelters" Romeny has are used to reduce/avoid taxes on money he had already paid taxes on.

For instance, Romney earns $10 million in 2005 and he maxes his 401k out at $15,000 so he pays full taxes on $9,985,000 which is about $2.8 million. He is left with $7.2 mill which he transfers to Caymens, where he can avoid taxes on interest and cap gains that the money invested might make. So he isn't avoiding taxes, he is avoiding double taxation.

Second, Romney himself has repeatedly proposed CLOSING the loop holes he is using. He is SPEAKING FROM PERSONAL EXPERIENCE that by having high marginal taxes and allowing off-shore loopholes, people will move money off shore to avoid taxes.

IOW, Romney is saying "We need to reform the tax code because I DO IT so I know others do it"

I don't see the problem.

If he left the 7.2 here and made say 800k in profit on investments would he pay tax on the 8 million, or just on the new 800k?

IF he put the money in a 401k, he would not pay on cap gains or interest but would pay on every dime he pulls out after retirement.

IF he just put it in a regular account he would pay on the gains + interest which right now is 35% on short term CGs and 15% on long term CGs and interest at 35%. So if half of the $800k was LT the other ST and interest, he'd pay $200k

Would you move your money offshore to save $200k/year??

I have no problem with anyone legally saving themselves money.  I would do the same.

  I am not sure where the double tax idea comes in.  He made 10 and was taxed 2.8.  Then  he made a new 800k (money he didn't have before) and is taxed on it (at a lower rate than income).

[John Galt?]

  I am not sure where the double tax idea comes in.  He made 10 and was taxed 2.8.  Then  he made a new 800k (money he didn't have before) and is taxed on it (at a lower rate than income).

The original article is focused on "retirement accounts, IRAs and 401Ks" and on those you can be double taxed. For example, if you put $1 million in a 401K the first $17,000 is not taxed but the rest of the $983,000 is fully taxed. All interest and Cap Gains earned by that money are deferred (not taxed that year) but ANY and ALL monies withdrawn are FULLY TAXED so if that $1 million earns 8% per year starting in 2005 then at 2013 (when Mitt turns 68) that account is worth $2,158,925. If Mitt withdraws $300k from that account he pays the full 35% or $105k even though he already paid taxes on the $138,958 portion that was the original investment. If he withdraws all $2,158,925 he pays 35% on every dime including the original $1 million which he already paid taxes on. IOW he is taxed twice on the same money.

The idea of 401Ks and IRAs is you max contribute when your earnings are in the highest tax bracket years, and when you retire you only pull out enough to keep you in a lower bracket (say <$40k/yr) but at very high income levels where you are subject to the AMT it makes sense to contribute 100s of thousands or millions to tax deferred accnts to avoid that AMT tax, but then you get screwed when you withdraw it.

[ONEBIGDADDY]

I have a hard time with this one point.

"Some experts have pointed to the blockers to help explain how Romney has been able to amass between $20.7 million and $101.6 million in a tax-free IRA, many times more than the typical amount an IRA can hold. Romney has not responded to questions about his IRA."

1) Ok why not move some investments around?
2) Why conceal this in the Cayman Islands?

I read this article to see if Romney was all that and a bag of rocks. It seems through the artical actually implies he was more lucky than good because of the housing market and wallstreet...John read this and see what your perspective is on it...Thanks OBD


http://www.ritholtz.com/blog/2012/08/the-romney-files-from-bain-to-boston-to-white-house-bid/

[John Galt?]

I have a hard time with this one point.

"Some experts have pointed to the blockers to help explain how Romney has been able to amass between $20.7 million and $101.6 million in a tax-free IRA, many times more than the typical amount an IRA can hold. Romney has not responded to questions about his IRA."

1) Ok why not move some investments around?
2) Why conceal this in the Cayman Islands?

I read this article to see if Romney was all that and a bag of rocks. It seems through the artical actually implies he was more lucky than good because of the housing market and wallstreet...John read this and see what your perspective is on it...Thanks OBD


http://www.ritholtz.com/blog/2012/08/the-romney-files-from-bain-to-boston-to-white-house-bid/

Decent article. But one thing not mentioned is that the returns Bain Capital managed to get where not ALL the work of Mitt Romney, I'm sure some of the hundreds of others that work there also helped.

Bain Captial's success was "above average" or "good" but not magical or Earth shattering. I wouldn't call him "lucky" though, he was in the right place at the right time because he was smart enough to eliminate some of the wrong places/wrong times and ambitious enough to gamble on some of those that remained. If not taking any risks guarantees you a ZERO return, then why is taking a risk and winning called "lucky" (usually by those that never take risks)? I would say he was smart, ambitious, and fortunate.

The way the private equity game works is you take big risks on a bunch of investments that you know will fail 2/3rds of the time hoping that a few will be such huge home-runs that they'll make up for the failures. IOW you put $100 mill in 100 companies ($1 mill each) and 66 of them fail, 30 of them return you 150%-200% and 3 of them make you 1000++%. So to really know how good vs fortunate Romney was we'd have to know how many of his investments were failures and that info is kept super-double secret.

[dbucfan]

If I may JG? - then Romney is not a cheat, a shirker, or defrauding the government?  How can that be accurate?  SImply because of an unreasonable, unfair, tortuous tax code Romney and Ryan have stated needs to be simplified without all the nonsensical (the kind description) waivers, amendments, restatements and contradictory or misleading additions?  And by eliminating the nonsensical portions reduce the overall rate - no way those two aren't evil personified.