Romney's IRA: Unearthing the Golden Goose.

    By Oxy Mora on Mon, 07/23/2012 - 12:48pm |

    In an interview on CNN, Steve Rattner, Obama's auto industry turnaround chief and by background a "private equity guy", said that Romney had used "every trick in the book" He then referred specifically to Romney's $100 million IRA, revealing that he had talked to his fellow industry people and, "None of us had even known that there was a possible trick, if you will." Damn, Mr. Rattner, I wasn't born yesterday. Give it up!

    If one makes quick resort to the compound interest tables and/or attempts to place Romney's results in the context of financial industry standards for return on investment one might conclude that $100 million in 33 years is an un-worldly pile of money, even fantastical. Forget that Romney should, respectfully, unearth the golden goose and show it to the American people, and that if he did so even I would vote for him---it's just that when I contemplate Mitt's kind of investment return I don't give a damn who wins this election, I just want to learn the secret tricks of Private Equity---perhaps the most apt term ever coined in the financial industry.

    Lest I be accused by Mitt-lovers of misquoting people, the term "golden goose" is one which Mitt himself used in his memoir, "Turnaround"---, to wit, "How could I walk away from the golden goose, especially now that it was laying even more golden eggs." Forget about the goose and the fact that no one has ever seen the goose, I'll settle for one of the eggs---especially one which hatches into a $100 million golden-chick-IRA. 

    Bill Cohan of Bloomberg in a recent article uses a SEP-IRA figure of $30K a year as Romney's possible contributions through 1999, resulting in $450,000. A quick check of the compound interest tables shows that it takes a return of more than 50% a year for a subsequent 10 years to get you to the $100 millon range by 2010. Even if I use ten times Cohan's figure, $5 million in 1999, it would require annual returns of 25% to produce $100 million.  Heretofore, only dictators of banana republics have achieved these kinds of results in general, and specifically, Mitt most likely is the first person in the U.S. to have achieved a result of such magnitude in an IRA---(I think I am safe in that unfounded assertion because if any other person had achieved  Romney's results they would certainly not be careless enough to admit it in public.) 

    In the above example I have most likely left myself wide open for criticism---an interest rate is not the same as an asset appreciation; could be the early years were really loaded; he transferred undervalued assets to his IRA and so what; etc.  (Really makes me wonder about those years, '01 and '02). I may be all wet so I invite others to use their own examples of how to grow an IRA to $100 million or more---in fact, $100 million may not be enough, so please enlighten me. 

    By way of context, some money managers tried to steer people away from Bernie Madoff's fund when it was showing returns of 11%---which was thought suspect. Madoff was at least smart enough not to put a 25% figure out there.  As for hedge funds, there are estimates of historical returns all over the map including one which says one could do better by investing in bonds. An acceptable range might be 7-12% on average. As far as the average retirement plan for "you people"---well, that's another subject.

    In all sincerity, are we in some kind of time warp here, or a parallel universe? Romney's tax returns are the only way for us to understand the truth about Romney's golden goose and how it informs us, or doesn't inform us, about his potential policy-making. What we are seeing so far in Romney's extra tax breaks for the rich is not comforting. We need to get a look at those golden eggs, Mitt, all of them, including the secrets behind your fantastical IRA. Kidding aside, how the hell did you do it? Even your pals in Private Equity want to know---at least I think they do.

     

    Comments

    I suspect that the deal is that his IRA was funded by his ownership of Bain Capital which was, for a long time, a wholly illiquid, private investment that only received a "value" when he sold the company to his partners.

    If he had taken some or all of his Bain ownership in the early years, he might have been able to claim that the shares weren't worth very much.  As owner he'd have certain payable obligations and not a lot of income and, in any event, there was no liquid market for his Bain securities.

    He could have placed those shares into the IRA at a very low cost basis.  As Bain completed deals and collected fees, he might have revalued the stake every year, for reporting purpose.  But the company didn't get a real value until he and his partners agreed on a price to sell it.  That would have been Romney's Facebook moment.


    by Michael Maiello on Mon, 07/23/2012 - 1:07pm

    Thanks, Destor. Don't know the particulars on transferring non-public shares (partnership interests?) into IRA's and revaluing them.  But I'm willing to learn. Let's see, self-directed SEP-IRA? Sell partnership interests? What to do with the proceeds.

    What % of his total "shares" went into the IRA pre 2000? Are there any rules in this game? What about Rattner, hardly objective, are these kind of results really unusual?

    I don't think we'll see the tax returns, so its all speculation. But hardly helpful to Romney.

     


    by Oxy Mora on Mon, 07/23/2012 - 1:56pm

    I don't know the exact rules but I don't agree with Rattner that this is unusual.  I've written financial planning pieces for corporate clients about exactly this kind of thing -- if you have a low value asset that you believe will appreciate rapidly and by a lot (such as shares of a private business) you want to get it into a trust of tax advantaged account very quickly.  Then it can grow tax free.  If Romney was really the sole owner of the holding company behind Bain, he could have put all or part of it into the IRA account to get to $100 million.

    I suppose that Rattner didn't do that with the Quadrangle Group.  But here's the thing about Rattner -- as a partner at Lazard, Rattner made way more money than Romney ever made as a Bain Consultant.  But as owner of a private equity fund, Quadrangle was never worth anything like what Bain was worth, and I believe that Quadrangle was wound down, rather than sold.


    by Michael Maiello on Mon, 07/23/2012 - 2:40pm

    Destor, there is an AARP article at www.lifetuner.com, "Mitt Romney's 100 million IRA"  which if anything, calls into question whether such a strategy even makes sense. So to fair and balanced, Mitt might not have been that smart. Never give this guy an even break.

    But no doubt he could have avoided taxes on dividends, state taxes on assets, if any, and so forth. I think sometimes folks hate taxes so much they actually make the wrong decision.  Or maybe it's all going to the church.

     


    by Oxy Mora on Mon, 07/23/2012 - 5:04pm

    I think sometimes folks hate taxes so much they actually make the wrong decision

    Unrelated to the topic at hand, but highly applicable to your sentence, I found it interesting to read that there are apparently fewer and fewer Republicans left in the state of California, but just as many anti-tax, anti-big-spending-government voters there as there always were, if not more:

    http://www.nytimes.com/2012/07/23/us/politics/california-republicans-see...

    What decisions will these types make in November? They are currently trying one "set of bums," chances are strong they will try the other, loathe as they are to affiliate with some of the rest of the platform? What I am sayin' is I don't see some tax evasion by Romney hurting that much, it's more: do you got the skills to ramp up private job creation or doncha, or are you actually more skilled at killing good jobs? That's where a big danger lies for him. These type of "formerly Republican" folks aren't going to love it if he is seen as cheating on taxes, but at the same time I don't think that's a major disqualifier for him, just because so many hate taxes so much.


    by artappraiser on Mon, 07/23/2012 - 5:50pm

    Thanks, Artsy. It's hard right now to discern from polls, for example, whether people give a damn about Romney's taxes, or for that matter, Romney's experience at Bain. Up until now the Obama team has been trying to make sure that Mitt isn't able in the debates to gloss over "my 25 years in the private business sector" and simply move on in space of thirty seconds. Obama is going to have to frame the discussion as, well, exactly what are you proposing, how will it work, and what is your relevant business experience.

    If the economy can't get past this slow patch and show some signs of life by the end of September, it's going to be a tough sell, regardless of the best framing by Obama.

    If Obama can get up a head of steam on the whole subject of inequality, tax fairness and also show that tax increases on the wealthy are an essential part of the equation in solving the problem of the "fiscal cliff" he can put Romney in a defensive corner---given Romney's history of tax privileges and low tax rates.


    by Oxy Mora on Mon, 07/23/2012 - 9:54pm

    Romney is in a parallel universe all right, with dictators, organized crime and drug cartels. As a commenter said:

    Heads of State have been offshoring wealth (usually plundered from their countries) for many years: Some examples notably include Mohammad Reza Pahlavi, the deposed Shah of Iran, Papa Doc Duvalier of Haiti, Agosto Pinochet of Chile, and Hosni Mubarak of Egypt. Usually, the cash is stashed so that when the dictator needs to make a quick getaway, there is a nice nest egg to cushion the blow of having to flee. 

    Mittens Romney is simply too politically tone deaf to see the parallels.

     


    by NCD on Mon, 07/23/2012 - 2:15pm

    Thanks, NCD. Speaking of traveling companions, according to a recent L.A. Times story, Romney's initial Bain investors included Robert Maxwell---drowned, plus post mortem discoveries of nefarious activities. And Sir Jack Lyons, who invested through a Panamanian entity and was later convicted of an unrelated stock fraud. Plus some folks from El Salvador, living in Miami, who invested $9 million in Bain. some of it through Panamanian entities. Can't use this, but I will---a brother of one of the investors doing jail time. Nice company---remember, that idea, people with whom you associate--.List also includes the Crockers of San Francisco---very respectable.  Does any of this really matter. I'd like to think so, but probably standard practice today.  


    by Oxy Mora on Mon, 07/23/2012 - 2:57pm

    What bullshit. Is there any doubt Romney earned the money in a wantonly capitalist society? So then STFU. Jesus effing christ, why not throw some Nazi parallels in too.

    Oh wait, you're American - Europe is vewwy vewwy scary.

    (while I think Timothy Egan's article is fairly stupid, he at least doesn't arbitrarily paint Romney in with ruthless dictators who absconded with large amounts of their people's wealth - what exactly is wrong with you?)

    And regarding Eduardo Saverin for the umpteenth time, he didn't park his money overseas - he parked his *ass* overseas. It's called moving. He's what, 30 years old? And we're already counting his retirement funds as ours? Chickens before hatched anyone?

    "This despite the fact that the richest 1 percent in the United States are paying the lowest tax rate in 80 years." Uh, right - maybe Saverin do it solely for the money, or maybe that benefit for the rich is only for those living in the US, not those who move around the other 98% of the globe.

     


    by PeraclesPlease on Mon, 07/23/2012 - 11:09pm

    By "earned" do you only mean "acquired legally"?


    by Dan Kervick on Mon, 07/23/2012 - 11:37pm

    No, goddammit - he *EARNED* it. You may not like *HOW* he earned it, but he got up off his ass and earned it. He helped make Bain successful, and built Bain Capital.

    What the hell is going on? Comparisons of Romney with Pinochet, Papa Doc, Mubarak? And then trying to tie Romney in with guys laundering money through El Salvador and the like?

    He had a Swiss bank/investment account and suddenly everyone's acting like he's a convicted ally of Al Capone. Senseless. Democrats are jumping the shark.


    by PeraclesPlease on Tue, 07/24/2012 - 1:30am

    Can't have any fun around here. But I agree Democrats can go overboard and defeat their purpose. Obama has now pivoted, good timing, to a comparison of two models going forward---which obviously was the whole point in defining Bain over the last couple of months. Romney can't skate on Bain in the debates.

    It's o.k. with me if people want to think of Romney as a White Knight business guy. He was good, no doubt. The issue is how the Bain model applies to running the country, getting GDP and employment up, etc.  

    Romney appeared on CNBC's "Kudlow" and with impunity labeled Obama as having "foreign" ideas (don't know the exact quote, but you get the point, the Rove crew is trying to label him as "other", "foreign", etc. ) But in truth Romney's business dealings, from inception, were "foreign"---initial investors, offshore entities, companies in China, outsourcing to China, etc.

    But I get your point, make the comparison in an effective way. But remember, we're Democrats, so its hopeless.

     


    by Oxy Mora on Tue, 07/24/2012 - 7:25am

    I don't care if they present him as Black Knight - he gutted companies and left the carcasses for the taxpayer - he certainly wasn't nice about it.

    But Papa Doc Duvalier & Pinochet comparisons? Wow. Surprised Pol Pot didn't make the cut.


    by PeraclesPlease on Tue, 07/24/2012 - 8:13am

    I don't believe he earned all that money.  That's a moral appraisal.  You are assuming that all of the money that is acquired legally in the pursuit of some successful venture is money earned.  But the flow of  monetary returns in any society is a matter of political and social choice, and those choices can be wrong.  Bain capital's "success" is stained by the moral deficiencies of capitalism in general, a system which assigns profits from productive activity to the owners of the capital inputs, independently of any creative participation of the owner.  Mere ownership breeds accumulation.  Romney's various efforts might have been responsible for generating astonishing flows of money to Bain capital.  But I find it preposterous to think those flows were commensurate with his efforts - not when so many people who expend much greater efforts every day for such meager rewards..

    We have a lovely set of euphemisms and myths in our society that if you give some enterprise a million dollars on Monday, and receive $10,000 in profits on Tuesday, then you have earned $10, 000.  But even a child can understand that we have perverted to meaning of "earned" once we start talking that way.


    by Dan Kervick on Tue, 07/24/2012 - 7:59am

    Yeah, I talked the kid who mowed my lawn out of a few bucks this way too. Wasn't he exploiting the lawnmore? And what is grass, do we own it or rent it? It always seems to be growing back anyway....

    Maybe time to step slowly away from the keyboard.


    by PeraclesPlease on Tue, 07/24/2012 - 8:11am

    Sorry, but if you think the considerations I am raising are some sort of wacky extremism it just shows you are an ignorant philistine with no grasp of western moral and intellectual history.


    by Dan Kervick on Tue, 07/24/2012 - 9:20am

    Or just maybe his alternate "grasp" of "western moral and intellectual history" paints a picture that makes him very wary of some of your even-a child-can-understand prescriptions. (Or maybe it's just that mom drilled into him that life wasn't fair.)


    by artappraiser on Tue, 07/24/2012 - 9:54am

    The issue isn't whether he disagrees with me and has different views.  Many do.  The problem is his insinuation that the moral critique of contemporary American capitalism is only the preserve of cranks.  In fact, seen against the history of western moral and political thought, the social tolerance for the kind of business in which Romney is engaged is an outlying position.  See the early chapters of the recent Skidelsky and Skidelsky.


    by Dan Kervick on Tue, 07/24/2012 - 10:11am

    To put it bluntly, your arguments are crap as well as being difficult to parse. However:

    Mere ownership breeds accumulation.  Romney's various efforts might have been responsible for generating astonishing flows of money to Bain capital.  But I find it preposterous to think those flows were commensurate with his efforts - not when so many people who expend much greater efforts every day for such meager rewards..

    So awful of Google to figure out a much better way to do search and clickthrough and corner the market on other people's clicks - guess not commensurate with their efforts when so many people have trouble finding their car keys in the morn. So uncommensurate of Amazon when so many bookstores have trouble surviving. (and that cloud business - why, most companies have their own data centers - why should Amazon make such a big profit?). It doesn't hold up.

    Putting together a fund doesn't guarantee you a big profit, though frequently funds can pretty well cover exposure. How is it that Romney's group outpaced so many other groups? (and skip the blatant awful worker-exploitation cases)  That's what "earned" means. If it were just the typical banker showing up for work and signing mortgages (or stealing people's mortgages) just because every homebuyer walks into a bank, well, that's a lower level of "earning". But even there, there have been banks in the past that helped build communities (Bank of America - then Bank of Italy - look up Giannini - grew out of small loans to help people through the Great Fire of San Francisco - though those touchie-feelie days are quite some ways in the past)


    by PeraclesPlease on Tue, 07/24/2012 - 10:42am

    How is it that Romney's group outpaced so many other groups?

    Why does that matter?   An investment fund just supplies capital owned by those looking to derive an income from the work of others.  The people actually prepared to do such work and create value are held hostage by our system to those who happen to own the capital.  The more the latter own, the greater their leverage.  And the greater their leverage, the more they can extract.   The fact that Romney's firm was especially skilled at finding sources of real existing value into which his investors could insert their tentacles explains why these investors would choose to work with Romney's firm.  But it doesn't entail that any of those investors earned the profits.


    by Dan Kervick on Tue, 07/24/2012 - 11:03am

    And there's water under the ground, but if someone divines it, builds a well, taps into the aquifer, they must be exploiting the earth.

    Knowledge in your book means nothing - it's just whoever bangs their head hardest against the wall, that grunt-level grabbing the levers of production? Project managers tell people how to move, plan how that grunt labor works - but just exploiting them - putting tentacles in. Cash flow seems important for some orgs, but for you, it's just an unwanted trap that ensnares the greater good of the underclass.

    Can play this game all night, not my favorite.


    by PeraclesPlease on Tue, 07/24/2012 - 2:17pm

    Sure, I'm a philistine. Seems I've been down that road of easy profits before, and say that easy $10K two days later never showed up. What to do? Mom told me not to lend my money, and here I am... Oh that capitalist road has its ups and downs - typically called "risks". And a few of those small exploited companies like a sugar daddy helping them to next stage of evolution (ever seen a shortage of Silicon Valley companies pitching to VCs?).

    And quite a few of those VCs lost quite a bit of money. Which means that risk bit becomes germane to the whole argument - the "earn" means paying attention to what's a chimera and what's a real opportunity and not getting suckered by trends.

    (Warren Buffett goes into detail about only investing in what he understands - typically less tech, more old school economy. Did he help turn around the Washington Post group, or did he just suck it dry? Would you say he "earns" his money, or he's just a bloodsucker with a friendlier face? And when Microsoft acquires another company, is it just being a bloodsucker or is it helping the economy, because there's only so much difference between an IT acquisition and a hedge fund managed investment.)

    So from this hick boy's view, Mr. Rmoney earned his rmoney on the whole, even though some percentage of those deals were unethical. But if you view investment itself as unearned profits on capital, well, our roads diverge, even though I see predatory behavior as unearned or even illicit profits.


    by PeraclesPlease on Tue, 07/24/2012 - 10:16am

    I think Buffet and Romney both earn a small share of what they actually make.  Their job involves a certain amount of real work: research, phone calls, management, etc.   Maybe sometimes they come home tired, and with a headache.  But the largest proportion of that they make derives from a set of legal institutions that permit the owners of productive inputs to extract a substantial portion of the value added to those inputs by the work of others, and keep it for themselves.


    by Dan Kervick on Tue, 07/24/2012 - 10:51am

    If I buy a smoothie at the 7-11, I'm extracting value from the inputs of the work of others, mean capitalist that I am. We do these exploitative arrangements dozens of times a day - strange we don't feel more guilty about abusing the productive inputs of others, whether it's taxi driver, basketball player, postlady, bartender, school teacher. Will try to remember to apologize tomorrow.


    by PeraclesPlease on Tue, 07/24/2012 - 2:20pm

    You are not reasoning carefully.  Whether or not the labor of the 7-11 employees, or other employees, is being exploited by you, or by others, depends on what those employees are given in return for the value they have created.

    If two people are chained naked to a bench at 7-11 where they are compelled by the 7-11 owner to make smoothies all day in exchange for subsistence food, and you then avail yourself of the opportunity to pay the extremely low price for smoothies that such slave labor permits the owner to charge, then you are indeed participating in their exploitation.

    Most work conditions are not so starkly brutal.  But the same issue arises in one degree or another with all of them.

    What you are really exchanging is usually your own work, since the money you used to make the purchase was probably given to you in exchange for some work you did.  So one question you can ask yourself is whether the work you did to earn the money to buy the smoothie is equal in merit or value, or in some other way, to the work that was done to produce the smoothie.

    The important issue here is private property ownership and the extremely valuable rights that our society has chosen to assign to private property ownership.  If 100 capitalists decide to give $100 million dollars of their own money to the CEO of 7-11 to buy equipment and inputs, and employ workers (including the CEO) at a salary determined by the CEO; and if as a result 7-11 produces goods for sale bringing in $150 million, then the 100 capitalists are entitled to keep the $50 million profit in addition to recovering the $100 million invested - unless we tax some of the profit away from them.  This is true even if they literally did nothing other than transfer the $100 million to 7-11's operating account, and negotiate the wage paid to the CEO for services rendered.

    You might think that this system "works" pretty well.  But there is something very unsettling about people receiving that much value in exchange for so little work and effort, while others receive so much less value in exchange for so much more work and effort.  What justifies a system in which a person can transform $100 million into $150 million, having done only a few hours of low impact work?  Let's assume, for the sake of argument, that the investors had absolutely earned or merited the initial $100 million stake - the property they committed.  It is still hard to see that the additional $50 million is commensurate in any way to any kind of additional merit on their part.

    Nor did the $50 million in additional value generated simply fall from the sky.  That $50 million came from the value that was added to existing goods by the application of human labor.   So we can't say that the capitalists merited reaping that value in the same way that we are entitled to the air we breathe.

    Why were the many workers in the chain willing to exchange their labor without claiming a larger share of the $50 million profits?  Because they are socially weak, and lack the bargaining power to claim it.  In our society, the sheer bargaining power that goes with ownership, wealth and inequality is regarded as a legitimate basis in itself for the flow of produced added value to owners, even if those owners do absolutely nothing else with the wealth other than possess it.  That's disturbing, even though many are not disturbed by it.


    by Dan Kervick on Tue, 07/24/2012 - 4:16pm

    You make a lot of assumptions about the owners of wealth, as simply "possessing it".

    Yes, people who are naturally confident, who have resources behind them, etc. are able to negotiate better deals than the weak and unconnected - thus unions and worker protection laws, etc.

    However, even if they aren't socially weak, if there are cheaper alternatives to that resource, then their bargaining power is limited.

    Is a CEO worth $50 million a year? (not many make this) Depends on the returns he brings to the company, and what would happen without him. This isn't always transparent, but obviously a Larry Ellison or Steve Jobs has shown the upside.

    In terms of capital, people invest with funds because of perceived ability to wade the financial waters with greater chance of success. (Buffett excelled with this at Berkshire Hathaway). It's not just the returns - it's also the limited risk, the reputation, etc. Otherwise people wouldn't invest in bonds.

    But you seem to be arbitrarily dismissing the handling of money as work, while presumably anything else from playing lead guitar to rocket design to showing real estate to running a shake machine to directing traffic. But of course it's a real job, and requires connections, understanding the market & players, knowing the ropes. It can be a disaster, as Dimon's efforts showed, with huge sums to lose.

    The issue is less the compensation for finance - it's how the system has been gamed to illegally take out all risk. They're showing each other their cards, so not only do they have legitimate bargaining advantage, they have illegal inside information, collusion, and then get the laws changed to guarantee them additional payouts (or use their access to get government cronies to send the deals their way).

    All of this is far away from the basic principle that people need venture capital and loans to set up homes and start up businesses with good ideas, and they need finance and management smarts to reorganize or sell off failing or struggling businesses. Workers get hurt from a badly managed bankrupt company or from a company bought out and stripped of assets. Part of that can be blamed on the economy, the market, bad management, bad workforce, and in some cases predatory financial practices. Society gets helped by a fluid, well-monitored financial system, which is why when running better, the US is much more efficient at building new businesses than any other country. But we keep trying to slaughter that goose that lays the eggs.


    by PeraclesPlease on Wed, 07/25/2012 - 2:14am

    PP - You forgot the part about financiers like Goldman's Fabulous Fab being job creators, that we must lower their taxes and roll back financial regulation, that Wall Street is a bastion of the self-regulating free market, and that strawberry pickers caused the housing crash forcing GWB to bailout Wall Street in 2008.


    by NCD on Wed, 07/25/2012 - 11:47am

    But don't worry on the politics.  Liberals will lose their nerve and coherence as always.  Most of theme have no serious moral objections to capitalism and the Bain capitals of the world, and are only being opportunistic is this matter.  It will all fall apart since they do no wish to be seen as challenging fundamentals of our economic system in any significant way.


    by Dan Kervick on Tue, 07/24/2012 - 8:06am

    I think we found our messiah to transform Social Security - an IRA in every pot, privatized accounts will never have a bad name again. 175% p.a. and counting - what could go wrong?

    (uh-oh, Digby answers my rhetorical. how come everyone's always picking on me?)


    by PeraclesPlease on Mon, 07/23/2012 - 6:32pm

    Think of 150 million people seeking alpha in privatized accounts. Wow. The trick would be to get out ahead of time, convert everything to gold and food supplies---and oh yes, an arsenal of weapons to fight off the poor and hungry hoards.


    by Oxy Mora on Mon, 07/23/2012 - 10:05pm

    Hordes, Oxy. In the post-apocalyptic world, hoards -- the gold, weapons and food you describe -- are your retirement package.


    by acanuck on Mon, 07/23/2012 - 10:23pm

    They called it a Ponzi Scheme? We'll give 'em a Ponzi Scheme...


    by PeraclesPlease on Tue, 07/24/2012 - 1:31am

    Thanks. Hordes. But "hungry hoards" ,with a little poetic license, works if you've hoarded your money instead of food supplies.

    Maybe I can eat my Apples shares.


    by Oxy Mora on Tue, 07/24/2012 - 7:28am

    Oxy, found this on Mother Jones......

    IRA Details

    According to financial-disclosure firms he's filed, Romney's Individual Retirement Account—a tax-advantaged retirement plan—is worth at least $20.7 million and as much as $101.6 million. It grows tax-free. But it's unclear how Romney's IRA grew so large. The annual limit for contributions to an IRA is currently $17,000, which employers can match if they choose. The limit for personal and matching contributions combined was around $30,000 per year when Romney was at Bain, suggesting that the most he could have put into his IRA was around $450,000. But his IRA could be worth 200 times that. (Even if Romney released several years worth of tax returns, it may not explain why his IRA grew so large.)

    Some financial and tax experts believe Romney may have used a complicated, highly technical tax dodge called a "blocker corporation" to get such a large amount of money into the IRA. Others have suggested that Romney put in some of his partnership shares in Bain Capital itself and valued them at zero because they represented future income—another obscure tax maneuver unavailable to most Americans. It's impossible to know for sure, because, as with so much else, Romney won't talk about it.


    by Aunt Sam on Tue, 07/24/2012 - 1:06pm

    "Silence" on these questions has so far been golden for Mitt:

    Gallup: Bain still a positive for Romney

    by Alexander Burns, Politico.com, July 23

    [....] Gallup's out with a round of data for USA Today that suggests, whatever the marginal impact of the Bain assault, Romney's businessman brand is more of an asset than anything else, and that in the big picture he's well positioned on the economy:

    By more than 2-1, 63%-29%, those surveyed say Romney's background in business, including his tenure at the private equity firm Bain Capital, would cause him to make good decisions, not bad ones, in dealing with the nation's economic problems over the next four years. …

    The Democratic attacks on Romney seem to have had limited effect on voters' assessments of him [....]


    by artappraiser on Tue, 07/24/2012 - 1:42pm

    Seems I made that argument the other day.

    Unless Democrats focus on real scandals - like Romney stealing the pensions of workers, leaving them out of work and penniless - we're just making him immune to future criticism.

    But we like to focus on him having big houses.


    by PeraclesPlease on Tue, 07/24/2012 - 2:23pm

    While we may, without risking the accusation of excessive optimism , hope that eventually the pitiable taxpayers will awaken to the sensation of their pockets being picked by Bain via the PBIC, that should not obviate entirely an examination of the requirement that a business model create real value (eg. Google) vs. simple rent, ex consideration of the underlying *effort or absence thereof on the part of the. beneficiary. *I say this secure in my status as the lazyist man in the country, creating value by getting high and then coming up with patentable pipe dreams.

    by jollyroger on Tue, 07/24/2012 - 3:35pm

    and Maureen Dowd is basically making the case that he will probably never answer these kinds of questions or release docs on finances voluntarily:

    [....] Romney is so secretive that he’s beginning to make the über-clandestine Cheney look like The Bachelorette.

    The Boston Globe reported Tuesday that although Romney promised “complete transparency” when he stepped in to save the Salt Lake City Olympics, he became a black hole: “Some who worked with Romney describe a close-to-the-vest chief executive unwilling to share so much as a budget with a state board responsible for spending oversight. Archivists now say most key records about the Games’ internal workings were destroyed under the supervision of a staffer shortly after the flame was extinguished [....]

    Romney spent $100,000 in state funds to replace office computers at the end of his term as governor and on the cusp of his 2008 presidential race, “as part of an unprecedented effort to keep his records secret,” reported Mark Hosenball of Reuters. Eleven Romney aides “bought the hard drives of their state-issued computers to keep for themselves,” Hosenball wrote. “Also before he left office, the governor’s staff had e-mails and other electronic communications by Romney’s administration wiped from the state servers, state officials say. Those actions erased much of the internal documentation of Romney’s four-year tenure as governor.” [....]


    by artappraiser on Wed, 07/25/2012 - 11:09pm

    A clear accounting of Romney's contacts with Bain has been hampered by his presidential campaign's reluctance to discuss the period in detail and complicated by conflicting accounts in some of Romney's comments and financial reports. Both the Romney campaign and Bain have declined to provide documentary materials that could shed light on Romney's role after 1999.......By STEPHEN BRAUN and JACK GILLUM


    by Aunt Sam on Thu, 07/26/2012 - 1:06am

    Mitt is the latest straight talking, never tell a lie or take responsibility, candidate of Republican Party.

    He is the product of, and comes from a long line of self proclaimed GOP American patriots, whose unquestioned devotion and loyalty to this nation, its Constitution, and its people, only wavers when they were subject to its laws. In the case of Mitt's ancestors, sending them south across the border.

    It is now Mitt's intention, to deny refuge to those among us who came from the nation that gave his father and his ancestors sanctuary. What else can you say, except that he is grasping, self promoting guy, devoid of gratitude or empathy, who pays only what is legally required, be it in taxes, Mormon tithes or compassion for his fellow man.


    by NCD on Tue, 07/24/2012 - 2:25pm

    Oh Beavis! You said compassion and Republican in the same paragraph! Heh heh.

    by jollyroger on Tue, 07/24/2012 - 3:24pm

     (oddly, George Romney ran for president in 1968 despite having been born outside the US - seems the term "natural born" applies to anyone with a parent who's a citizen, as citizenship then comes automatically)

    Is Mitt denying legal immigrants refuge or only illegal ones? And were his ancestors illegal?

     


    by PeraclesPlease on Tue, 07/24/2012 - 4:04pm

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