How much tax has Romney paid on all the money he made at Bain Capital?
That is another question that has yet to be answered. Romney hasn’t released any of his recent tax returns. A
front-page story in the
Times last month, by Nicholas Confessore, Christopher Drew, and Julie Creswell, revealed that, although he left Bain Capital in 1999, his retirement agreement entitled him to share in the profits that the firm made on all of its deals through 2009. And the story noted, “Much of his income from this 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.”
That “probably” is probably superfluous. Managers of private-equity funds, even retired ones like Romney, routinely class much of the income they receive as “carried interest,” which is taxed at just fifteen per cent—compared to a top rate of income tax of thirty-five per cent. Billionaire private-equity moguls like Kravis and multi-multi-millionaire private-equity moguls like Romney have presumably been exploiting this loophole for years. If and when Romney publishes his tax returns, outside experts will be able to figure out how much he has saved in recent years, and whether, as some suspect, the effective federal tax rate he paid was lower than the rate that many middle-income workers pay.
