Discussions of Wealth in America


If a man has an apartment stacked to the ceiling with newspapers, we call him crazy. If a woman has a trailer house full of cats, we call her nuts. But when people pathologically hoard so much cash that they impoverish the entire nation, we put them on the cover of Fortune magazine and pretend that they are role models.

Class warfare or simply paying your fair share?

Former Gov. Mitt Romney (R-MA) last night on CNN actually said:

I’m not concerned about the very poor.

to which conservative writer Jonah Goldberg (National Review) asks “What is wrong with this guy?” and Michelle Malkin quips “Let them eat food stamps.”

Meanwhile, Romney has not addressed the questions raised by Brian Beutler about possible offshore tax avoidance scheme raised on his on-the-record press call last week.

The briefing cleared up several questions, but left others unanswered – including one from TPM that will either exculpate Romney from allegations that he’s used investments in offshore entities to avoid U.S. taxes, or reveal that his campaign has not fully addressed those allegations.

On the call, Romney’s trustee pledged get back to us with this information. But despite multiple inquiries in the days since the conference call, the Romney camp has not set the record straight one way or another….

An IRA can’t finance investments with debt, and, in the United States, it can’t invest in entities that lever up, without being hit by the UBIT.

But if an IRA invests in an offshore fund, and that fund levers up, it can avoid the UBIT altogether. And at 35 percent that’s no small tax to get around, according to multiple tax experts.

When first questioned about this on the call, Romney’s trustee noted, “Governor Romeny’s IRA is not structured in the Caymans, it’s not located in the Cayman’s. It’s tax deferred just like your IRA, and my IRA.”

But in a followup, I asked if his IRA had invested in any offshore entities that would have made it subject to the UBIT if those entities were located on U.S. soil. Romney’s staff has yet to provide the answer.

They talk about class warfare - the fact of the matter is there has been class warfare for the last thirty years. It's a handful of billionaires taking on the entire middle-class and working-class of this country. And the result is you now have in America the most unequal distribution of wealth and income of any major country on Earth and the worst inequality in America since 1928. How could anybody defend the top 400 richest people in this country owning more wealth than the bottom half of America, 150 million people? The other reason Romney pays a lower tax rate than most of us is that so-called “carried interest” (the commission charged by hedge fund managers) is treated as long-term capital gains and taxed at 15%. According to Mother Jones, Bain Capital

spent $300,000 between August 2007 and April 2008 lobbying the House and Senate on bills that threatened the carried interest loophole. Along with other private equity titans like Kohlberg Kravis Roberts and Apollo Management, Bain and its ilk paid lobbying shops, public relations firms, and trade groups like Ogilvy and the Private Equity Growth Capital Council an estimated $15 million between January 2009 and April 2010 to convince lawmakers to keep the loophole alive. The force of those combined lobbying efforts kept the carried interest loophole wedged open, denying the federal government some $10 billion in revenues.

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