What's In Your IRA? Don't Worry, Mitt Romney Doesn't Know Either
Oh HI, rapidly aging baby boomers ! How is that retirement planning coming? From what we hear, not so hot! Perhaps if America’s baby boomers had been as smart as Mitt Romney and found a way to siphon $100,000,000 (ONE HUNDRED MILLION) into an IRA (individual retirement account to you young ones) in spite of strict caps on contributions, and found tax loopholes to exploit and sent their moneys on exotic vacations to places like Bermuda, they would not have to suckle so hard from the government's teat and would be able to exercise Personal Responsibility of the kind that Saint Reagan preached.
As TPM reports:
After a six-month hiatus, a Vanity Fair article about Mitt Romney’s tangled web of investments has thrust his foreign holdings and complicated tax strategies back into the center of the 2012 campaign. But questions have persisted for months about an individual retirement account held by the Romneys valued at upwards of $100 million — a stunning amount for a savings vehicle designed to provide middle class retirees comfortable, but non-lavish retirement.
His IRA raises two key questions, both of which his campaign has consistently declined to answer: How, despite a $6000 legal limit on annual contributions to an IRA, did Romney’s IRA grow to over $100 million? And did he avoid any U.S. taxes on its enormous returns?
How DID he avoid these taxes? How indeed? Are you sitting down? Good because you’ll be shocked—SHOCKED—to know that he did so through telling a very specific type of lie about the size of the initial contributions. But this lie benefits rich people, mostly, so don’t worry, it’s totally legal and above board! And then he told another kind of a lie, that also benefits rich people, so is also probably legal. Except this is less a lie than a kind of an obfuscation, which is kind of complicated so to be fair, Romney probably didn’t think of it himself:
Romney’s campaign has publicly insisted that none of Romney’s foreign investments have allowed him to avoid U.S. taxes. But the campaign has persistently declined to answer questions about a specific, but obscure tax, that Romney’s IRA may have helped him circumvent….
In other words Romney’s IRA may hold stock in Romney’s offshore funds, those funds could have levered up [in other words, been highly leveraged -ed]and yielded huge returns to the IRA [translation: "paid a lot of money to the individual retirement account"] . That would allow Romney not just to circumvent the annual contribution limits, but to avoid a 35 percent tax that would have kicked in if the IRA had taken on the debt-financed investments directly.
In other words, he was using a tax-deferred vehicle to make a bunch of investments, even though the tax-deferred vehicle was designed to help Poors and Middle Class people have a dignified retirement, NOT help rich people evade taxes. This, of course, is just a theory -- it’s possible that he told different kinds of legal lies that benefit rich people, instead of or in addition to these. Except we’ll never REALLY know, since Romney is still refusing to release enough tax returns to let the experts figure it out, probably because of class warfare concerns. Anyway, you plebes wouldn't understand how it works, because of not being educated and all .
[ TPM ]