One of the mysteries surrounding Mitt Romney’s taxes is how the former private-equity executive managed to get $100 million into a family trust for his children without incurring federal gift taxes.I'm all for tax loopholes, but the point here is that the politically active super-wealthy have edges written into the law that give them tax breaks that the rest of us will never see. There is a growing elite in this country that are above all laws and regulations, laws and regulations that anchor down the rest of us.
A potential clue may be found in a previously unreported 2008 presentation made by a partner at law firm Ropes & Gray LLP, which represents the GOP presidential nominee. It focuses on how private-equity executives could minimize gift and estate taxes by giving family members some of their “carried interest” rights, a major form of compensation that entitles private-equity executives to a slice of the firm’s future investment profits.
This is complicated stuff, but bear with us even if you’re not a tax geek. Much remains unclear about Mr. Romney’s taxes given his limited disclosure and the complexity of his personal finances.
The attorney at Ropes & Gray wrote that in the 1990s and early 2000s estate-planning lawyers “commonly advised” that executives could claim a value of zero on these transfers of carried-interest rights for federal gift-tax purposes. He said the practice ended by 2005.
Friday, August 24, 2012
How Romney Was Able to Put $100 Million into a Family Trust Without Paying Any Gift Taxes
I am not making this up. Certain assets at one time were allowed to be considered of zero value, when being placed in a family trust. WSJ explains:
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its not above the law if it was legal. the problem is congress lets others write the laws for them, therefore loopholes are built-in to benefit the authors/backers of the tax law.
ReplyDeleteThe gift tax usually hits only the wealthy, so the statement "the politically active super-wealthy have edges written into the law that give them tax breaks that the rest of us will never see" is inapplicable in this case.
ReplyDeleteYou confuse the legitimately wealthy 1% with the crony banksters in the top.01%
DeleteRichard Dale Fitzgerald 2
This is a very common practice. Trusts are immune from most banking and regulatory oversight.
ReplyDeleteIts money in the banking system but only the managing attorney knows what happens with the money in the account. A lot of political cash gets washed this way too since its virtually untraceable.
>> the problem is congress lets others write the laws for them,
ReplyDeleteNo. Congress writes the laws. Period.
Congressmen promised they would protect you and the interests of the country as a whole. Then they failed to do that. Do not re-elect them unless you like it.
Of all the people involved, only congressmen behaved badly. A father working to see that his kids get more of his earnings is acting responsibly. A corporation working to see that their stockholders get the benefits of tax loopholing are acting responsibly.
The only ones not acting responsibly are the ones who promised you they'd serve you and then didn't. The only bad guys in this situation are the congressmen. They write the laws. Period.