Romney Tax Returns Show Strategy for Moving Money to Kids
Source: Bloomberg Businessweek
Republican presidential candidate Mitt Romney and his wife, Ann, have used sophisticated estate- planning techniques for more than a decade to minimize taxes and amass at least $100 million for their family outside of their estate.
The couple created trusts as early as 1995, when Romney was building wealth as chief executive officer of Bain Capital LLC. They packed one for their children with investments that stood to appreciate and set up another for charity that provides a tax deduction and income. The candidates retirement account, valued at as much as $87.4 million, also may benefit his heirs for decades.
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Wealthy couples use strategies allowed under the federal tax system such as moving assets to trusts so that the money may be subject to little or no gift and estate taxes, Sloan said. The Romney family trust is worth $100 million, according to the campaign. That money isnt included in the couples personal fortune, which the campaign estimates at as much as $250 million.
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Transactions like the one used by the Romneys have drawn scrutiny in Obamas proposals to raise revenue. The presidents 2013 budget plan would reduce many of the benefits of such trusts by coordinating income and transfer tax rules including how taxes are paid and when gift-and-estate levies apply. Thats because current law can result in the transfer of significant wealth by the deemed owner without transfer-tax consequences, according to the Treasury Departments explanation of the proposals.
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Read more: http://www.businessweek.com/news/2012-08-26/romney-tax-returns-show-strategy-for-moving-money-to-kids
Have we ever had a candidate for president who was as likely to see financial benefits for himself and his family as Romney is, if he can get elected and prevent the changes that President Obama would like to make?
msongs
(67,361 posts)DallasNE
(7,402 posts)That these laws really don't go through committee where witnesses are called to testify on various proposals before votes are taken. Then on top of that, the bill aren't read by members of Congress, instead relying on staff summaries where the staffers aren't that versed on the nuance of what these bills that are written by lobbiest so they go under the radar. My bet is that not many in Congress actually know whether these loopholes exist in the tax code that Romney is using to save millions and millions each and every year.
Another thing that astounds is how much money Romney makes every year on up to $350 million in assets. The last couple of years Romney has reported roughly $21 million in income and that represents a 6% return on $350 million. My 401k pays .01% on cash held in my account. If Romney's money was in my money market fund his income from $350 million would have been $35,000 versus the $21 million he actually had. Keep in mind too that it is not income until the gain has been realized. Let's take a look at someone else who's tax returns we have seem. Warren Buffett reported $45 million in income and has a net worth or about $55 billion or just under 1%. This makes Romney 6 times better than Buffett as an investor. Yeah, right.
wordpix
(18,652 posts)These Congresscritters are lobbied by the richies' lobbyists, whether it's big oil or big finance. They know perfectly well they're creating loopholes to allow non-payment of taxes offshore or whatever the loophole is. As we saw with the BP oil blowout, the lobbyists themselves wrote the regs that the federal agency MMS operated under, and the MMS consisted of former members of the oil industry, or people who were literally in bed and doing drugs with same. No different with the finance industry. I have no doubt (and no proof, but it'll just take a leak or two) that these loopholes are well vetted by the finance lobby and even written by them, and Congress signs off, esp. when it's explained that they will benefit financially by using the loopholes.
Case in point: Wall St. company employees cannot make trades based on insider information. Congress can and does, and it's legal.
oldsarge54
(582 posts)I'm sure that Romney had all the legal advice in the world and not one law has been broken. Just like I'm sure corporations who share near monopoly powers (oil, internet, airlines, etc) are not breaking the law in providing virtually the same prices for the same services are not breaking the law. The question is about ethical, and George Orwell's comment about some pigs are more equal than others.
tanyev
(42,522 posts)formercia
(18,479 posts)on how to close the loopholes and rid the tax statutes of fuzzy language that allows people of means to circumvent the Law.
wordpix
(18,652 posts)Auntie Bush
(17,528 posts)way that will decrease their own income. Fat chance we'll ever have any kind of fair tax rate ever passed in congress.