Romney's Olympic Horse Ballet Dressage
- Thread starter THE KOD
- Start date
Israel beating the war drums and says it will be a 30 day war with Iran .
How the fawk can they be so stupid as to say this.
I got news for them. If they strike Iran nuke programs they are going to start a shit storm of war.
Hezbollah is going to start sending the new missles they got shipped in from Iran that Israel dont even know about.
Iran will send a hellstorm of their missles into Israel and US bases near them.
Iran fought with Iraq for nine years in which both sides lost million of men and billions of war damage.
This will be worse.
When this happens the US is going to be pulled in almost immediately and lets face another war mongering military ramping up at every level.
How many of our men and woman will die again for these middle east ppl who have fought and died without thought for 100s of years.
The only way I see a war like this ending in 30 days is if Atomic weapons are used on Iran.
Can you believe that stopping nukes from being built by using them on another country would be the right thing to do ?
Prepare for WWIII my friends.
Israel - this war would end in 30 days :142smilie
who are they trying to bamboozle with that one:SIB
How the fawk can they be so stupid as to say this.
I got news for them. If they strike Iran nuke programs they are going to start a shit storm of war.
Hezbollah is going to start sending the new missles they got shipped in from Iran that Israel dont even know about.
Iran will send a hellstorm of their missles into Israel and US bases near them.
Iran fought with Iraq for nine years in which both sides lost million of men and billions of war damage.
This will be worse.
When this happens the US is going to be pulled in almost immediately and lets face another war mongering military ramping up at every level.
How many of our men and woman will die again for these middle east ppl who have fought and died without thought for 100s of years.
The only way I see a war like this ending in 30 days is if Atomic weapons are used on Iran.
Can you believe that stopping nukes from being built by using them on another country would be the right thing to do ?
Prepare for WWIII my friends.
Israel - this war would end in 30 days :142smilie
who are they trying to bamboozle with that one:SIB
Former Military Intelligence head Amos Yadlin on Saturday urged President Barack Obama to visit Israel to allay fears that the US is not fully committed to stopping the Iranian nuclear program.
?The US president should visit Israel and tell its leadership ? and, more important, its people ? that preventing a nuclear Iran is a US interest, and if we have to resort to military action, we will,? Yadlin said in an opinion piece published in The Washington Post.
Yadlin also asked the US to provide Israel with advanced military technology and intelligence, contingent on Israeli pledges to delay a strike.
Yadlin presented a five-point plan to the Obama administration designed to convince ?allies and adversaries alike that military action is real, imminent and doable.?
He called on Obama to notify Congress in writing that he reserves the right to use military force on Iran. He added that the US should increase its military presence in the Persian Gulf, and should also publicly commit to the security of its allies in the region.
Yadlin, who left his IDF post in 2010 and is currently the head of the Institute for National Security Studies, has been a vocal supporter of Prime Minister Binyamin Netanyahu and Defense Minister Ehud Barak, who have both hinted that Israel would not leave the fate of Israel in the hands of the US.
?Israel cannot afford to outsource its security to another country,? Yadlin wrote in the Washington Post. ?But if the United States wants Israel to give sanctions and diplomacy more time, Israelis must know that they will not be left high and dry if these options fail.?
Yadlin, one of the pilots who took part in the 1981 attack on Iraq?s Osirak nuclear reactor, hinted that Israel was capable of hitting the heart of the Iranian nuclear program, but said Israel would need US support ?both the day after and the decade after a strike.?
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We will delay a strike for continued diplomacy if you give us another ..........
wtf blackmail is that
oh oh oh and We the mighty Israel will strike on our own if you will not commit to us.
:142smilie :142smilie
They will be wiped off the map if they dont have America behind them and they know it.
Yeh drag us into WWIII Israel . you know you have to .
Iran is just not going to nuke them even if they get the bomb. It is going to equalize things in the middle east.
Palestine, jordan, egypt, would all be affected horribly by Iran setting off a nuke in Israel. And Iran would not have the knowledge to have a really good nuke. It would be kind of a modified one that could carry radioactivity to the gold dome and Jeruselum.
Come on they aint going to do that.
Yeh go strike on your own Israel.
its pathetic they have to have America to fight and pay for all their military battles.
I have a newphew in Afghanistan and I do not want him shipped to Iran . His tour is over in Feb
?The US president should visit Israel and tell its leadership ? and, more important, its people ? that preventing a nuclear Iran is a US interest, and if we have to resort to military action, we will,? Yadlin said in an opinion piece published in The Washington Post.
Yadlin also asked the US to provide Israel with advanced military technology and intelligence, contingent on Israeli pledges to delay a strike.
Yadlin presented a five-point plan to the Obama administration designed to convince ?allies and adversaries alike that military action is real, imminent and doable.?
He called on Obama to notify Congress in writing that he reserves the right to use military force on Iran. He added that the US should increase its military presence in the Persian Gulf, and should also publicly commit to the security of its allies in the region.
Yadlin, who left his IDF post in 2010 and is currently the head of the Institute for National Security Studies, has been a vocal supporter of Prime Minister Binyamin Netanyahu and Defense Minister Ehud Barak, who have both hinted that Israel would not leave the fate of Israel in the hands of the US.
?Israel cannot afford to outsource its security to another country,? Yadlin wrote in the Washington Post. ?But if the United States wants Israel to give sanctions and diplomacy more time, Israelis must know that they will not be left high and dry if these options fail.?
Yadlin, one of the pilots who took part in the 1981 attack on Iraq?s Osirak nuclear reactor, hinted that Israel was capable of hitting the heart of the Iranian nuclear program, but said Israel would need US support ?both the day after and the decade after a strike.?
..............................................................
We will delay a strike for continued diplomacy if you give us another ..........
wtf blackmail is that
oh oh oh and We the mighty Israel will strike on our own if you will not commit to us.
:142smilie :142smilie
They will be wiped off the map if they dont have America behind them and they know it.
Yeh drag us into WWIII Israel . you know you have to .
Iran is just not going to nuke them even if they get the bomb. It is going to equalize things in the middle east.
Palestine, jordan, egypt, would all be affected horribly by Iran setting off a nuke in Israel. And Iran would not have the knowledge to have a really good nuke. It would be kind of a modified one that could carry radioactivity to the gold dome and Jeruselum.
Come on they aint going to do that.
Yeh go strike on your own Israel.
its pathetic they have to have America to fight and pay for all their military battles.
I have a newphew in Afghanistan and I do not want him shipped to Iran . His tour is over in Feb
When President Obama announced last month that he was barring a Baghdad bank from any dealings with the American banking system, it was a rare acknowledgment of a delicate problem facing the administration in a country that American troops just left: for months, Iraq has been helping Iran skirt economic sanctions imposed on Tehran because of its nuclear program.
The little-known bank singled out by the United States, the Elaf Islamic Bank, is only part of a network of financial institutions and oil-smuggling operations that, according to current and former American and Iraqi government officials and experts on the Iraqi banking sector, has provided Iran with a crucial flow of dollars at a time when sanctions are squeezing its economy.
The Obama administration is not eager for a public showdown with the government of Prime Minister Nuri Kamal al-Maliki over Iran just eight months after the last American troops withdrew from Baghdad.
Still, the administration has held private talks with Iraqi officials to complain about specific instances of financial and logistical ties between the countries, officials say, although they do not regard all trade between them as illegal or, as in the case of smuggling, as something completely new. In one recent instance, when American officials learned that the Iraqi government was aiding the Iranians by allowing them to use Iraqi airspace to ferry supplies to Syria, Mr. Obama called Mr. Maliki to complain. The Iranian planes flew another route.
In response to questions from The New York Times, David S. Cohen, the Treasury Department?s under secretary for terrorism and financial intelligence, provided a written statement saying that Iran ?may seek to escape the force of our financial sanctions through Iraqi financial institutions.? But he added that ?we will pursue, and are actively pursuing, efforts to prevent Iran from evading U.S. or international financial sanctions, in Iraq or anywhere else.?
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This is what America gets when we fawk around in the middle east. We go into Iraq and spend billions of dollars and American lives to hand Saddam and his henchmen.
We build the place back up that we bombed the holy shit out of for more billions.
We finally leave and 8 short months these fawking camel heads are helping Iran hide money to beat sanctions.
how fawking stupid is Amercia.
why do we get involved in this shit.
Yeh Israle we are all in to help yu take down Iran.
and after a ten year war you will also turn around and fawk America.
how stupid are we.
The little-known bank singled out by the United States, the Elaf Islamic Bank, is only part of a network of financial institutions and oil-smuggling operations that, according to current and former American and Iraqi government officials and experts on the Iraqi banking sector, has provided Iran with a crucial flow of dollars at a time when sanctions are squeezing its economy.
The Obama administration is not eager for a public showdown with the government of Prime Minister Nuri Kamal al-Maliki over Iran just eight months after the last American troops withdrew from Baghdad.
Still, the administration has held private talks with Iraqi officials to complain about specific instances of financial and logistical ties between the countries, officials say, although they do not regard all trade between them as illegal or, as in the case of smuggling, as something completely new. In one recent instance, when American officials learned that the Iraqi government was aiding the Iranians by allowing them to use Iraqi airspace to ferry supplies to Syria, Mr. Obama called Mr. Maliki to complain. The Iranian planes flew another route.
In response to questions from The New York Times, David S. Cohen, the Treasury Department?s under secretary for terrorism and financial intelligence, provided a written statement saying that Iran ?may seek to escape the force of our financial sanctions through Iraqi financial institutions.? But he added that ?we will pursue, and are actively pursuing, efforts to prevent Iran from evading U.S. or international financial sanctions, in Iraq or anywhere else.?
..............................................................
This is what America gets when we fawk around in the middle east. We go into Iraq and spend billions of dollars and American lives to hand Saddam and his henchmen.
We build the place back up that we bombed the holy shit out of for more billions.
We finally leave and 8 short months these fawking camel heads are helping Iran hide money to beat sanctions.
how fawking stupid is Amercia.
why do we get involved in this shit.
Yeh Israle we are all in to help yu take down Iran.
and after a ten year war you will also turn around and fawk America.
how stupid are we.
Crucifixion is a hadd punishment, stipulated in the Quran, Sura 5:33, and therefore an obligatory part of Shariah,? Lopez said. ?It?s been a traditional punishment within Islam since the beginning, even though it?s not exclusively Islamic. The Romans used it too.
?So, the Egyptian Muslim Brotherhood haven?t the option to not include crucifixion within their legal code. It?s obligatory to comply with Shariah. And yes, it?s for shock value also to be sure,? Lopez said.
Lopez includes a warning for Egypt?s Christians and compares the coming treatment of the Christians to the Jews in Germany.
?The Copts must get out of Egypt as soon as possible ? for the many millions who will not be able to get out, I expect things will continue to deteriorate ? just as they did for Germany?s and Europe?s Jews from the 1930s onward,? Lopez said.
?The warnings were there long before the ghettos and round-ups and one-way train trips to the concentration camps began in the 1940s,? she said.
If you think this is just an Egyptian problem, you?re wrong. Dead wrong. Read ?Muslim Mafia: Inside the Secret Underworld That?s Conspiring to Islamize America?
Author Pamela Geller of Atlas Shrugs, an analyst of the Middle East and Islam, fully agrees and also cites the Quran.
?The Christians are in serious trouble, because the Quran in Sura 9:29 commands Muslims to wage war against them and subjugate them, and they?re also identified with the hated West and the U.S.,? Geller said.
Geller also turned to Sura 5:33.
Islamic hardliners
?These are Islamic hardliners who do everything by the Quran. The Quran says, ?Indeed, the penalty for those who wage war against Allah and His Messenger and strive upon earth [to cause] corruption is none but that they be killed or crucified or that their hands and feet be cut off from opposite sides or that they be exiled from the land,? Geller said.
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maybe we should have this in America
but hangings is our normal not crusifixition
so many muslims in America
the law could be a eye for a eye
muslim brotherhood :facepalm:
?So, the Egyptian Muslim Brotherhood haven?t the option to not include crucifixion within their legal code. It?s obligatory to comply with Shariah. And yes, it?s for shock value also to be sure,? Lopez said.
Lopez includes a warning for Egypt?s Christians and compares the coming treatment of the Christians to the Jews in Germany.
?The Copts must get out of Egypt as soon as possible ? for the many millions who will not be able to get out, I expect things will continue to deteriorate ? just as they did for Germany?s and Europe?s Jews from the 1930s onward,? Lopez said.
?The warnings were there long before the ghettos and round-ups and one-way train trips to the concentration camps began in the 1940s,? she said.
If you think this is just an Egyptian problem, you?re wrong. Dead wrong. Read ?Muslim Mafia: Inside the Secret Underworld That?s Conspiring to Islamize America?
Author Pamela Geller of Atlas Shrugs, an analyst of the Middle East and Islam, fully agrees and also cites the Quran.
?The Christians are in serious trouble, because the Quran in Sura 9:29 commands Muslims to wage war against them and subjugate them, and they?re also identified with the hated West and the U.S.,? Geller said.
Geller also turned to Sura 5:33.
Islamic hardliners
?These are Islamic hardliners who do everything by the Quran. The Quran says, ?Indeed, the penalty for those who wage war against Allah and His Messenger and strive upon earth [to cause] corruption is none but that they be killed or crucified or that their hands and feet be cut off from opposite sides or that they be exiled from the land,? Geller said.
..............................................................
maybe we should have this in America
but hangings is our normal not crusifixition
so many muslims in America
the law could be a eye for a eye
muslim brotherhood :facepalm:
The Washington Post's editorial board mocked Mitt Romney's tax plan on Sunday.
"Mitt Romney, the presumed Republican nominee for president, promises to lower everyone?s income tax rate without reducing revenue. This sounds terrific. Why didn?t we think of it sooner?"
The editorial, titled 'Mitt Romney's garbage', argued that Romney's plan to cut taxes and lower the deficit is unfeasible.
"It?s reasonable to assume that his cuts would, as did President Bush?s, worsen the nation?s deficit. Until he?s willing to explain how he would avoid such a result, he has little standing to criticize Mr. Obama?s fiscal shortcomings."
The piece also took issue with Romney's claim that his plan to cut taxes by 20% for everyone helps the middle class and not the rich.
A recent study found that Romney's plan would mostly benefit the wealthiest Americans. Romney called the findings "garbage."
"You can?t simultaneously lower tax rates, take in as much money as before and protect the middle class," the Post editorial board wrote.
The editorial echoed comments made by President Obama earlier this month. Obama called Romney's plan "Romney hood... like Robin Hood in reverse."
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Willard Hood :142smilie
this guy has no plan that will work
he knows it, we know it, everyone knows it
what a dork
America is in trouble
"Mitt Romney, the presumed Republican nominee for president, promises to lower everyone?s income tax rate without reducing revenue. This sounds terrific. Why didn?t we think of it sooner?"
The editorial, titled 'Mitt Romney's garbage', argued that Romney's plan to cut taxes and lower the deficit is unfeasible.
"It?s reasonable to assume that his cuts would, as did President Bush?s, worsen the nation?s deficit. Until he?s willing to explain how he would avoid such a result, he has little standing to criticize Mr. Obama?s fiscal shortcomings."
The piece also took issue with Romney's claim that his plan to cut taxes by 20% for everyone helps the middle class and not the rich.
A recent study found that Romney's plan would mostly benefit the wealthiest Americans. Romney called the findings "garbage."
"You can?t simultaneously lower tax rates, take in as much money as before and protect the middle class," the Post editorial board wrote.
The editorial echoed comments made by President Obama earlier this month. Obama called Romney's plan "Romney hood... like Robin Hood in reverse."
........................................................
Willard Hood :142smilie
this guy has no plan that will work
he knows it, we know it, everyone knows it
what a dork
America is in trouble
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So now it comes out that Paul Ryan had a black girlfiend in college. And she may have been on welfare.
Wait a minute.
Does that mean what I think it means ?
Skul, RAYMOND, rusty , hedge
wtf .............. how can this be tolerated
interracial goings on in the GOP
what will the teabaggers say now.
this cannot stand
this is not the GOP
what was that about rape and the GOP again
and a hurricane is headed for Tampa during the GOP convention . Could this be a sign from God
for Romney to release his tax ?
oh my oh my :facepalm: :facepalm:
Wait a minute.
Does that mean what I think it means ?
Skul, RAYMOND, rusty , hedge
wtf .............. how can this be tolerated
interracial goings on in the GOP
what will the teabaggers say now.
this cannot stand
this is not the GOP
what was that about rape and the GOP again
and a hurricane is headed for Tampa during the GOP convention . Could this be a sign from God
for Romney to release his tax ?
oh my oh my :facepalm: :facepalm:
WASHINGTON -- Mitt Romney started to lay out his energy plan at a Tuesday event, but because there were reporters in the room, he decided against doing so.
During a Houston fundraiser, Romney told a room of about 125 donors that he planned to unveil his comprehensive energy plan this week. He said his proposal will specifically relate to fossil-based fuels. But then, he said no more.
"I know that we have members of the media here right now, so I?m not going to go through that in great detail," Romney said, according to a pool report from the event.
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yeh for Gods sake dont tell any of your ideas
Willard knows that would be a big mistake :facepalm:
no brains
no ideas
no backbone
:facepalm:
During a Houston fundraiser, Romney told a room of about 125 donors that he planned to unveil his comprehensive energy plan this week. He said his proposal will specifically relate to fossil-based fuels. But then, he said no more.
"I know that we have members of the media here right now, so I?m not going to go through that in great detail," Romney said, according to a pool report from the event.
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yeh for Gods sake dont tell any of your ideas
Willard knows that would be a big mistake :facepalm:
no brains
no ideas
no backbone
:facepalm:
You left out the part about Ryan insisting that the GF get an abortion.
Twice. :facepalm:
?Vengeance is mine, I will repay, says the Lord.?
If locusts follow the Florida flood, you can be certain that God is delivering vengeance on the Republicans.:0074
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two I just heard it was three
does that mean that he actually put his thingee in there ?
I am not sure teabaggers can tolerate that
Just as Christie gets to the podium the building will be blown down and neocons sent scurrying like rats into the streets.
............................................................
we are talking about teabaggers
my motto is that it is all pink on the inside.
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Willard would get attorneys involved
seriously this guy is not a quick thinker on his feet
bring on the debates
Willard will look like some kind of a nymcompoop
ron paul calls him stupid
Willard would get attorneys involved
seriously this guy is not a quick thinker on his feet
bring on the debates
Willard will look like some kind of a nymcompoop
ron paul calls him stupid
WASHINGTON -- Tax experts who have begun to examine the Bain Capital documents released Thursday by Gawker are raising questions as to whether presumptive GOP presidential nominee Mitt Romney has paid all the taxes he owed.
At issue are two tax-avoidance techniques employed by Bain Capital, the firm founded by Romney, which have been commonly used in the private equity world but have come under increasing legal scrutiny.
The first scheme involves owning U.S. dividend-paying stocks in an offshore account and pretending, for accounting purposes, not to own the stock. Instead, the taxpayer tells the Internal Revenue Service that he owns a derivative product that is identical in every way to the stock -- except it isn't the stock, so therefore no U.S. taxes are owed. It's called a "total return equity swap," because the buyer still gets the benefit -- the "total return" -- of owning the stock, or equity.
"This use of total return equity swaps, such as to avoid the U.S. dividend withholding tax, was very widespread for more than a decade, and may not be dead yet, although the IRS issued a shot-across-the-bow Notice concerning the practice in 2010," writes Daniel Shaviro, the Wayne Perry Professor of Taxation at New York University School of Law. "But taxpayers who engaged in it to avoid the dividend withholding tax were coming perilously close to committing tax fraud, in cases where the economic equivalence to direct ownership was too great."
The second technique is "not legal," according to Victor Fleischer, a tax expert and professor of law at the University of Colorado. A taxpayer saves substantial amounts of money by pretending that regular income received as a management fee for running a private equity firm is not income, but is instead a capital gain. That drops the tax rate on that income from 35 percent to 15 percent.
Citing the Gawker documents, Fleischer notes that Bain engaged in the management-fee maneuver to reduce the tax bill of its investors. "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," he writes.
Shaviro, meanwhile, notes that Bain employed a version of the total return equity swap and says that taxpayers who engage in the practice have little legal justification for doing so. "[T]he only leg that taxpayers had to stand on in some of these cases was common practice and the apparent lack of IRS enforcement (not a very strong leg if the correct application of the law was clear)," he writes. "How far out on the limb were Bain-affiliated foreign entities that were making money through total return equity swaps, and claiming not to owe U.S. withholding tax? And what should we make of this, for purposes of the presidential campaign, if what they were doing, while legally dubious, was common practice?"
"The unauthorized disclosure of a number of confidential fund financial statements is unfortunate," said Charlyn Lusk, a spokeswoman for Bain Capital. "Our fund financials are routinely prepared by auditors and demonstrate a commitment to transparency with our investors and regulators, and compliance with all laws."
Michele Davis, a spokeswoman for the Romney campaign, said that Romney is not responsible for whatever tax strategy employed. "As we have said many times before, Governor and Mrs. Romney's assets are managed on a blind basis. They do not control the investment of these assets, the investment decisions are made by a trustee," he said.
But if Bain used improper tax-avoidance techniques, the Romneys would be required to amend their returns regardless of the blind nature of the investments.
Private equity managers already get the vast majority of their income from capital gains, which are taxed a lower rate, but also take a fee -- typically 2 percent -- off the top. That management fee is income. But some private equity managers have claimed to "waive" that fee in exchange for future capital gains.
"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," writes Fleischer. "The problem is that it is not legal."
The IRS says the fee cannot be waived in exchange for capital gains if the income "relates to a substantially certain and predictable stream of income from partnership assets." In other words, Bain investors would need to convince a judge that their revenue stream was risky and not "substantially certain and predictable."
Fleischer says he doesn't think the tactic would hold up in court. "Because the deals vary in their aggressiveness, there is some disagreement among practitioners about when it works and when it doesn?t," he writes. "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."
But did Romney himself benefit from these maneuvers? And is Romney responsible for the legally dubious tax avoidance strategies Bain employed? Yes, Fleischer concludes:
Yes, Romney left Bain in 1999 or 2002. But as part of his severance agreement, he continues to receive interests in these funds, which he has reported on his financial disclosures. In the usual case, a departing partner would receive an economic stake in the GP (Bain Capital Partners X, LP), rather than an economic stake in the LP (Bain Capital Fund X, LP) ? representing a payment for the management services he provided in the past. Indeed, because he filed an 83(b) election, we can be sure that he received GP interests as part of his severance agreement, and that he therefore benefited personally from management fee conversions.
[...]
Romney here is not like a passive mutual fund investor. He helped engineer the funds in the first place. For at least some of the funds, the fee conversion was set in place at the time of the fund?s formation ? in the case of Fund VII, when Romney was the sole shareholder of the management company that actually waived the fees (2000). It seems reasonable to infer that fee conversions were in place for earlier vintages of Bain Capital funds as well. I haven?t yet reviewed all of the Gawker documents, but we are talking hundreds of millions of dollars in tax liability on these funds ? one hundred million in Fund IX alone (20% of the $500 million converted), another $70 million in fund X. It is unthinkable that in the 1990s through 2002, when Romney was putting together funds, that he was unaware of the fee conversion strategy, or that he was unaware that he continued to benefit from it today.
UPDATE: 12:30 p.m. -- Rep. Sandy Levin of Michigan, the top Democrat on the tax-writing House Ways and Means Committee, questioned the fee conversion strategy in a statement.
?[R]eports today indicating that Bain managers converted even their regular management fees into additional carried interest income that is taxed at capital gains rates is a particularly egregious example of how wealthy fund managers are able to avoid paying the same tax rates on their compensation as other Americans," he said. "This is a stark reminder of why Congress needs to act to close this loophole."
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:scared :scared
At issue are two tax-avoidance techniques employed by Bain Capital, the firm founded by Romney, which have been commonly used in the private equity world but have come under increasing legal scrutiny.
The first scheme involves owning U.S. dividend-paying stocks in an offshore account and pretending, for accounting purposes, not to own the stock. Instead, the taxpayer tells the Internal Revenue Service that he owns a derivative product that is identical in every way to the stock -- except it isn't the stock, so therefore no U.S. taxes are owed. It's called a "total return equity swap," because the buyer still gets the benefit -- the "total return" -- of owning the stock, or equity.
"This use of total return equity swaps, such as to avoid the U.S. dividend withholding tax, was very widespread for more than a decade, and may not be dead yet, although the IRS issued a shot-across-the-bow Notice concerning the practice in 2010," writes Daniel Shaviro, the Wayne Perry Professor of Taxation at New York University School of Law. "But taxpayers who engaged in it to avoid the dividend withholding tax were coming perilously close to committing tax fraud, in cases where the economic equivalence to direct ownership was too great."
The second technique is "not legal," according to Victor Fleischer, a tax expert and professor of law at the University of Colorado. A taxpayer saves substantial amounts of money by pretending that regular income received as a management fee for running a private equity firm is not income, but is instead a capital gain. That drops the tax rate on that income from 35 percent to 15 percent.
Citing the Gawker documents, Fleischer notes that Bain engaged in the management-fee maneuver to reduce the tax bill of its investors. "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," he writes.
Shaviro, meanwhile, notes that Bain employed a version of the total return equity swap and says that taxpayers who engage in the practice have little legal justification for doing so. "[T]he only leg that taxpayers had to stand on in some of these cases was common practice and the apparent lack of IRS enforcement (not a very strong leg if the correct application of the law was clear)," he writes. "How far out on the limb were Bain-affiliated foreign entities that were making money through total return equity swaps, and claiming not to owe U.S. withholding tax? And what should we make of this, for purposes of the presidential campaign, if what they were doing, while legally dubious, was common practice?"
"The unauthorized disclosure of a number of confidential fund financial statements is unfortunate," said Charlyn Lusk, a spokeswoman for Bain Capital. "Our fund financials are routinely prepared by auditors and demonstrate a commitment to transparency with our investors and regulators, and compliance with all laws."
Michele Davis, a spokeswoman for the Romney campaign, said that Romney is not responsible for whatever tax strategy employed. "As we have said many times before, Governor and Mrs. Romney's assets are managed on a blind basis. They do not control the investment of these assets, the investment decisions are made by a trustee," he said.
But if Bain used improper tax-avoidance techniques, the Romneys would be required to amend their returns regardless of the blind nature of the investments.
Private equity managers already get the vast majority of their income from capital gains, which are taxed a lower rate, but also take a fee -- typically 2 percent -- off the top. That management fee is income. But some private equity managers have claimed to "waive" that fee in exchange for future capital gains.
"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," writes Fleischer. "The problem is that it is not legal."
The IRS says the fee cannot be waived in exchange for capital gains if the income "relates to a substantially certain and predictable stream of income from partnership assets." In other words, Bain investors would need to convince a judge that their revenue stream was risky and not "substantially certain and predictable."
Fleischer says he doesn't think the tactic would hold up in court. "Because the deals vary in their aggressiveness, there is some disagreement among practitioners about when it works and when it doesn?t," he writes. "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."
But did Romney himself benefit from these maneuvers? And is Romney responsible for the legally dubious tax avoidance strategies Bain employed? Yes, Fleischer concludes:
Yes, Romney left Bain in 1999 or 2002. But as part of his severance agreement, he continues to receive interests in these funds, which he has reported on his financial disclosures. In the usual case, a departing partner would receive an economic stake in the GP (Bain Capital Partners X, LP), rather than an economic stake in the LP (Bain Capital Fund X, LP) ? representing a payment for the management services he provided in the past. Indeed, because he filed an 83(b) election, we can be sure that he received GP interests as part of his severance agreement, and that he therefore benefited personally from management fee conversions.
[...]
Romney here is not like a passive mutual fund investor. He helped engineer the funds in the first place. For at least some of the funds, the fee conversion was set in place at the time of the fund?s formation ? in the case of Fund VII, when Romney was the sole shareholder of the management company that actually waived the fees (2000). It seems reasonable to infer that fee conversions were in place for earlier vintages of Bain Capital funds as well. I haven?t yet reviewed all of the Gawker documents, but we are talking hundreds of millions of dollars in tax liability on these funds ? one hundred million in Fund IX alone (20% of the $500 million converted), another $70 million in fund X. It is unthinkable that in the 1990s through 2002, when Romney was putting together funds, that he was unaware of the fee conversion strategy, or that he was unaware that he continued to benefit from it today.
UPDATE: 12:30 p.m. -- Rep. Sandy Levin of Michigan, the top Democrat on the tax-writing House Ways and Means Committee, questioned the fee conversion strategy in a statement.
?[R]eports today indicating that Bain managers converted even their regular management fees into additional carried interest income that is taxed at capital gains rates is a particularly egregious example of how wealthy fund managers are able to avoid paying the same tax rates on their compensation as other Americans," he said. "This is a stark reminder of why Congress needs to act to close this loophole."
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:scared :scared
Show us the tax returns, give us idea of what you are going to cut or defund, quit telling us what we can or cannot ask you and tell us what your policy ideas are instead of not telling us a damn thing except trust you and then surprise - your policies are nothing that I value. If you want my vote, then tell me what you stand for, for goodness sakes you ARE applying for the office of President of the United States of America and you have changed your position so many times or not said anything at all that I am not clear on what you would actually do as President.
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this guy has his finger on it
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Mitt Romeny is CREEPY and the only reason I can see that anyone would vote for him is because:
a) They don't understand that the Republicans in the House voted against every one of Obama's JOBS Act resolutions, thereby blocking the JOBS Act from going to the Senate where it surely would have passed, thereby denying any relief to the economy and joblessness numbers or:
b) They think that they too are, by some miracle, going to be ultra-rich tomorrow and they don't want to pay a dime of taxes on it because then they too will be able to afford their own security, health care, and education for their children or:
c) They still can't believe we actually have a President who isn't Caucasian and that said President can actually do the job, even though he is a person of superior integrity and intelligence to Mitt Romney. Which will be proven in the debates, unless Mitt Romney comes up with some excuse to not debate, which would not surprise me in the least. My bet? The moderators won't agree on "forbidden topics" as demanded by the Mitt Romney team.
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this guy has his finger on it
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Mitt Romeny is CREEPY and the only reason I can see that anyone would vote for him is because:
a) They don't understand that the Republicans in the House voted against every one of Obama's JOBS Act resolutions, thereby blocking the JOBS Act from going to the Senate where it surely would have passed, thereby denying any relief to the economy and joblessness numbers or:
b) They think that they too are, by some miracle, going to be ultra-rich tomorrow and they don't want to pay a dime of taxes on it because then they too will be able to afford their own security, health care, and education for their children or:
c) They still can't believe we actually have a President who isn't Caucasian and that said President can actually do the job, even though he is a person of superior integrity and intelligence to Mitt Romney. Which will be proven in the debates, unless Mitt Romney comes up with some excuse to not debate, which would not surprise me in the least. My bet? The moderators won't agree on "forbidden topics" as demanded by the Mitt Romney team.
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