Tuesday, December 20, 2011

Mitt Romney, not a man of the people

Looks like Mitt's still raking in the dough from Bain Capital:

Almost 13 years ago, Mitt Romney left Bain Capital, the successful private equity firm he had helped start, and moved to Utah to rescue the Salt Lake City Olympic Games and begin a second career in public life.

Yet when it came to his considerable personal wealth, Mr. Romney never really left Bain.

In what would be the final deal of his private equity career, he negotiated a retirement agreement with his former partners that has paid him a share of Bain's profits ever since, bringing the Romney family millions of dollars in income each year and bolstering the fortune that has helped finance Mr. Romney's political aspirations.

The arrangement allowed Mr. Romney to pursue his career in public life while enjoying much of the financial upside of being a Bain partner as the company grew into a global investing behemoth.

The problem here is not so much that Romney is still making money from Bain -- who wouldn't try to reach this sort of retirement deal if given the chance, particularly from a firm one started and still feels a connection to? -- but that he has made his fortune off destroying companies and jobs for profit, and that the money he's made through this deal has been taxed at a low rate:

In the process, Bain continued to buy and restructure companies, potentially leaving Mr. Romney exposed to further criticism that he has grown wealthier over the last decade partly as a result of layoffs. Moreover, much of his income from the arrangement has probably qualified for a lower tax rate than ordinary income under a tax provision favorable to hedge fund and private equity managers, which has become a point of contention in the battle over economic inequality. 

ThinkProgress puts it more clearly:

Romney has had to contend with the fact that Bain made a lot of its money buying up companies, then laying off workers and reneging on benefits to gut those companies, burying them with debt as Bain walked away with millions...

Since Romney left, Bain has made its money gutting companies like KB Toys and Clearchannel, laying off thousands of workers and leaving the companies under heavy debt loads, while Romney has reaped the benefit. Adding insult to injury, the money Romney has been collecting from Bain is likely not taxed as normal income but as "carried interest," meaning it is subject to the capital gains tax rate of 15 percent rather than the top income tax rate of 35 percent...

Citizens for Tax Justice estimated that Romney pays about a 14 percent tax rate, below the level at which many middle-class families are paying. And he's paying that low rate on money made via dismantling companies and eliminating jobs. 

Romney has been trying to position himself as a job creator and as a friend of the middle class, but his whole career has proven him to be exactly the opposite.

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