5 votes

Bottom line: Romney has not paid all the taxes required by law. (Victor Fleisher, CO Law Prof)

This is by the Colorado professor who blogged about the tax evasion strategies revealed in the Bain info dump today.



Management Fee Conversion. Current law on carried interest is already a sweetheart tax deal for private equity, but why not make it better? Private equity folks are not the type to walk past a twenty-dollar bill lying on the sidewalk. In the 2000s it became common for private equity fund managers to “convert” their management fees into carried interest. There are many variations on the theme, but here’s how many deals worked: each year, before the annual management fee comes due, the fund manager waives the management fee in exchange for a priority allocation of future profits. There is minimal economic risk involved; as long as the fund, at some point, has a profitable quarter, the managers get paid. (If the managers don’t foresee any future profits, they won’t waive the fees, and they will take cash instead.) In exchange for a minimal amount of economic risk, the tax benefit is enormous: the compensation is transformed from ordinary income (taxed at 35%) into capital gain (taxed at 15%). Because the management fees for a large private equity fund can be ten or twenty million per year, the tax dodge can literally save millions in taxes every year.

The problem is that it is not legal. Because the deals vary in their aggressiveness, there is some disagreement among practitioners about when it works and when it doesn’t. But in my opinion, and the opinion of many tax practitioners, the practices that were common in the private equity industry in the 2000s became very, very questionable, and it’s unlikely that they would have stood up in court.

Fund VII. Gawker today posted some Bain documents today showing that Bain, like many other PE firms, had engaged in this practice of converting management fees into capital gain. Unlike carried interest, which is unseemly but perfectly legal, Bain’s management fee conversions are not legal. If challenged in court, Bain would lose. The Bain partners, in my opinion, misreported their income if they reported these converted fees as capital gain instead of ordinary income


Bottom line: Mitt Romney has not paid all the taxes required under law.

The above story is now in the NYT (with padding)

Trending on the Web

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So what?

It will come to nothing because the foxes are in charge of the chicken house.
Chances are Barry wasn't born in the USA....nothing comes of it.
Dick Cheney was in charge of Americas protected air space when 3000 people were killed by airplanes that flew for up to one and a half hours with impunity....nothing came of it.
Bankers, backed by (stone)Wall street and the Fed, steal everyday...and nothing comes of it.
Lawyers and accountants lie, cheat and steal from the tax payer every day...and nothing comes of it.
The American public are raped by their elected, self-serving public officials every day....and then pay them for it!

Please forgive my ignorance

What is this Dick Cheney Americas air space thing? I am sorry, I haven't been awake long.

May 2001, Dick Cheney, Vice president, was the 1st civilian

to be placed in charge of NORAD (North American Aerospace Defense Command). It is NORAD that scrambles fighter jets to hi-jacked or off coarse plans. Jets were successfully scrambled 64 times in the 12 months preceding 9/11
This man was at the very top of the chain of command while the POTUS was out of the way on 9/11.
During the horror of 911 Mr Cheney failed on ALL counts while he was in charge of NORAD from the Presidential Bunker, planes weren't immediately scrambled, then scrambled too late, sent up to Canada, out to sea, anywhere except where they were supposed to be.
Leaving out the glaring question of whether or not this was deliberate, he should have been put on trial for causing so many deaths because the chain of command collapsed under his leadership.
If you are not scared of be dragged to a mental hospital, indefinitely detained, brain-washed and drugged, you can goggle this information.

Thank you Jill,

as you can see I am afraid to even use my name. I appreciate your words towards my understanding. There is still alot I am trying to figure out. It seems like I watched a movie about 911 where some of those shenanigans were reported. I don't remember if Cheney was mentioned. Seems like it was a commercial movie at the theatre, but I cannot remember well. I just remember a scene with alot of confusion in a command center. Are you serious about not googling things? I am sure I sound pretty stupid, but as soon as I think I am awake, I come to find out how unawake I am. I think I am still in the process. I am finding discovery very difficult once again.


Waking up is like being born...it hurts first...but after that, it only gets better!


And now, Thank you for the encouragement.

I am not trying to convince you

I am trying to convince delegates in Tampa to not vote for Romney.
Try and persuade some that Romney will lose and lose BADLY.
(Which he will.)

In many ways you are as asleep as ignorant GOP voters.
Try and persuade.

Do you not think that the above will put off a few more Indie's from voting for Romney?
One thing on it's own won't do much.
But there are LOADS of different things showing the amoral, unethical and unprincipled character of Romney.
It builds a picture.
What would this guy be like as President? A total crook stealing taxpayers money, that's what he would be like.

The ordinary Dems are FAR FAR better campaigners than the people on here.

"In the end, more than they wanted freedom, they wanted security. They wanted a comfortable life, and they lost it all -- security, comfort, and freedom. When ... the freedom they wished for was freedom from responsibility, then Athens ceased to be free."