DID YOU KNOW that while Mitt Romney tells us he isn’t involved with Bain Capital and his ‘blind trust’ investments there, he tells the IRS that he’s an active participant. Why? Because you get more money from the IRS with an active, rather than passive, investment status:
The distinction is valuable, for the IRS treats passive and active income and losses differently. If a passive investment loses money, the taxpayer can only write off that loss if passive gains have also been made. But active losses can be written off at a 35 percent rate and deducted from the taxpayer’s ordinary income. In other words, a taxpayer wants active losses, not passive losses. So by describing many of his investments as active, Romney saves himself millions of dollars in taxes.
With those active investments, he is also securing a tax break few Americans enjoy: When he wins, he’s paying a 15 percent rate on the gain. When he loses, he’s writing it off at 35 percent, meaning that tax policy is subsidizing Romney’s risk in his Bain investments.
In other words, Romney didn’t build that, at least not without taxpayer backing.
So while Romney tells us he retroactively retired from Bain in 1999 (to avoid criticism about layoffs and other controversies) – and as Huffington Post notes when “tax experts charged that he benefited from legally dubious tax avoidance strategies employed by Bain, his campaign noted that the investments are kept in a blind trust completely out of his control” — we now learn that as recently as 2010 he was telling the IRS that he was actively involved so that he can grab the better tax rates on investment wins and losses.
That doesn’t sound like a retirement or a “blind” trust. Unbelievably, this man will be nominated as the GOP’s presidential candidate this week, and you have to ask: who is he lying to — the American public or the IRS?
And where are the rest of his tax returns?