Sunday, September 02, 2012
Tax Evasion At Bain Capital ?
It seems that Bain Capital is one of a number of equity fund companies that is having their financial dealings investigated by the New York State Attorney General. He has issued subpoenas to look at their financial records. Attorney General Eric Schneiderman believes these companies have been intentionally listing management fees as capital gains.
Why would that matter? Because management fees should be considered earned income, and taxed as such. But capital gains are taxed at the much lower rate of 15%. By declaring these management fees to be capital gains instead of earned income, Bain Capital could be evading millions of dollars in taxes -- and it would be an intentional and very illegal act.
Was the company doing this while headed by Romney? Nobody knows yet just how far back this illegal evasion has been going on. Hopefully, the Attorney General can figure that out when he gets the financial records. We do know though that Romney still gets a great deal of his income from Bain Capital, and if the company is illegally evading taxes then Romney is benefitting from that.
Frankly, I wouldn't be surprised to learn this is a practice imposed while Romney was still the Bain CEO. After all the lies he has told on the campaign trail, it is quite clear that honesty is not something he values much.