Bain Capital being investigated for tax evasion

[GHook93]

What a shocker, D's want another distraction! This fruitless investigation will end with no findings of wrong doing in December.

Maybe they should investigate the 100s of companies OBAMA directed funds to that are out of business!!!

Neg

ALBANY, N.Y. — New York’s attorney general is investigating tax strategies of some of the nation’s largest private equity firms, including Bain Capital, founded by Republican presidential nominee Mitt Romney, an official familiar with the probe said Sunday.

Attorney General Eric Schneiderman is examining whether the firms have abused a tax strategy to avoid paying hundreds of millions of dollars in taxes, said the official, who spoke on the condition of anonymity because of the sensitivity of the probe. The practice involves converting some fees collected for managing accounts into fund investments, resulting in a lower tax rate.

Source: NY attorney general investigating private equity firms, including Romney-founded Bain - The Washington Post

 

[GHook93]

Your a liar and very dishonest! Nothing in your SOURCE says anything about anything other than Bain Capital purchasing KB! No fraud no dividend raiding (which is impossible douche bag)! NOTHING.

Here is all it says about KB going out. They were a victim of one of your other favorite targets - Walmart.

KB Toys was purchased and taken private by Bain Capital in 2000. Four years later, due to increasing competition from national discount chains such as Wal-Mart and Target and its enormous debt, on January 14, 2004, K·B Toys filed for Chapter 11 bankruptcy protection and closed 365 stores.

Romney's KB Toys fraud

Bain Capital 'purchased' KB for the respectable price of $ 305 million dollars on December 8, 2000.

Bain Capital only offered $ 18 million in cash, the rest was leaveraged debt put on the company.

Sixteen months after the buyout, Bain Capital paid itself $85 million in dividends in early 2002.

January 14, 2004, K·B Toys filed for Chapter 11 bankruptcy protection and closed 365 stores.

Three years later the rest of the 156 stores were closed down.

KB Toys - Wikipedia, the free encyclopedia

Mental Midget, here is a free lesson on venture capitalism. It's about buying struggling companies at a low price, reorganizing, reducing their debt, making them competitive, getting them to cash flow positive, having a positive revenue to debt ratio, having a positive asset to debt ratio, showing a competitive advantage and showing a positive future outlook. Once all that is achieved they sell it at a profit. If all that isn't achieved they take a nice loss.

Now when you are purchasing struggling companies, there is a good chance many CANNOT be turned around! KB was one of them. Walmart, Target and Toys-r-us had too much a grip on the market for KB to have a place.

All venture capitalist have some failures, but ones who stay in business for decades and accumulate over $100 mil in SELF-MADE wealth have more HITS than MISSES!!! Romney is one of them. He knows what it takes to have a successful business and employment growing business environment. All Obama knows how to do is pander to groups for votes, create an environment toxic to job growth and get more people reliant on the government so he can control them!

 

[Barb]

So, allegations of criminal activity should be ignored if either a principle or a periphery is involved in a political race?

What "criminal activity?" The Attorney General has admitted that the practice he's investigating is perfectly legal.

Funny thing about tax shelters, they're prone to abuse.
Tucked into a bill that increased regulations on individual citizens in order to make it harder to qualify for SS Disability benefits was this little gift to corporations and the wealthiest Americans:

In addition, this bill reduces from 30 percent to 10 percent the rate of Virgin Islands tax imposed on certain payments of Virgin Islands source income to U.S. corporations, citizens, and resident aliens. The lowering of the tax rate will significantly encourage U.S. investment in the Virgin Islands and will give the Virgin Islands parity with Guam and the Northern Mariana Islands.169

Ronald Reagan: "Statement on Signing a Bill Amending the Social Security Disability Insurance System ," January 12, 1983. Online by Gerhard Peters and John T. Woolley, The American Presidency Project, retrieved December 4, 2011 from Ronald Reagan: Statement on Signing a Bill Amending the Social Security Disability Insurance System

This add on set the Virgin Islands up as a tax shelter for wealthy Americans and encouraged businesses to move there so they could deduct ninety percent of their earnings or profits from their taxes, including capital gains taxes, saving them millions. The IRS recently started auditing them and faced a bipartisan push from The House Ways and Means Committee to limit how many years they could go back in doing so.170
Birnbaum, Jeffrey H. The Washington Post, ―Bill Would Limit IRS's Reach in Virgin Islands‖ Wednesday, November 7, 2007 retrieved December 26, 2011 from Bill Would Limit IRS's Reach in Virgin Islands

There were stipulations to taking the tax cut, residency stipulations that many who took advantage of that tax haven didn't meet. Whoda thunk there’d be abuse?

 

[Katzndogz]

What a shocker, D's want another distraction! This fruitless investigation will end with no findings of wrong doing in December.

Maybe they should investigate the 100s of companies OBAMA directed funds to that are out of business!!!

Neg

ALBANY, N.Y. — New York’s attorney general is investigating tax strategies of some of the nation’s largest private equity firms, including Bain Capital, founded by Republican presidential nominee Mitt Romney, an official familiar with the probe said Sunday.

Attorney General Eric Schneiderman is examining whether the firms have abused a tax strategy to avoid paying hundreds of millions of dollars in taxes, said the official, who spoke on the condition of anonymity because of the sensitivity of the probe. The practice involves converting some fees collected for managing accounts into fund investments, resulting in a lower tax rate.

Source: NY attorney general investigating private equity firms, including Romney-founded Bain - The Washington Post

Democrats have to do something now that the years of investigation into Joe Arapio resulted in nothing but having the whole case dropped.

The investigation into Scott Walker went the same way.

 

[GoneBezerk]

The state of NY tried to shakedown Rush Limbaugh for years over taxes, then he just left their shithole.

They still sent him audit paperwork when he was no longer living and working in NYC, they are insane scumbags trying to tax an American that doesn't live or work in their state over his politics.

 

[Freewill]

How amazing that the Obama administration is having Bain Capital investigated in an election year, what are the chances????

 

[Quantum Windbag]

Why does the idiot that started this thread put everything in politics?

 

[Soggy in NOLA]

Great, another BS thread from Chrissy the pathalogical liar.

 

[Soggy in NOLA]

Why does the idiot that started this thread put everything in politics?

This is what you get when one huffs Rustoleum all day.

 

[bripat9643]

So, allegations of criminal activity should be ignored if either a principle or a periphery is involved in a political race?

What "criminal activity?" The Attorney General has admitted that the practice he's investigating is perfectly legal.

Funny thing about tax shelters, they're prone to abuse.
Tucked into a bill that increased regulations on individual citizens in order to make it harder to qualify for SS Disability benefits was this little gift to corporations and the wealthiest Americans:

In addition, this bill reduces from 30 percent to 10 percent the rate of Virgin Islands tax imposed on certain payments of Virgin Islands source income to U.S. corporations, citizens, and resident aliens. The lowering of the tax rate will significantly encourage U.S. investment in the Virgin Islands and will give the Virgin Islands parity with Guam and the Northern Mariana Islands.169

Ronald Reagan: "Statement on Signing a Bill Amending the Social Security Disability Insurance System ," January 12, 1983. Online by Gerhard Peters and John T. Woolley, The American Presidency Project, retrieved December 4, 2011 from Ronald Reagan: Statement on Signing a Bill Amending the Social Security Disability Insurance System

This add on set the Virgin Islands up as a tax shelter for wealthy Americans and encouraged businesses to move there so they could deduct ninety percent of their earnings or profits from their taxes, including capital gains taxes, saving them millions. The IRS recently started auditing them and faced a bipartisan push from The House Ways and Means Committee to limit how many years they could go back in doing so.170
Birnbaum, Jeffrey H. The Washington Post, ―Bill Would Limit IRS's Reach in Virgin Islands‖ Wednesday, November 7, 2007 retrieved December 26, 2011 from Bill Would Limit IRS's Reach in Virgin Islands

There were stipulations to taking the tax cut, residency stipulations that many who took advantage of that tax haven didn't meet. Whoda thunk there’d be abuse?

So "abuse" means taking advantage of laws passed by Congress and operating strictly in accordance to the letter of those laws? Next you'll tell us that driving below the speed limit is an "abuse" because the police department can't earn any money from giving you a ticket.

Only liberal turds would even attempt to call totally lawful behavior an "abuse."

 

[Synthaholic]

Gee, I'm sure this isn't political.



lol

So, allegations of criminal activity should be ignored if either a principle or a periphery is involved in a political race?

Obama executed a US citizen w/o trial, and you looked the other way.

Your love of al Qaeda terrorists is noted.

 

[Synthaholic]

How amazing that the Obama administration is having Bain Capital investigated in an election year, what are the chances????

Are you too fucking stupid to know the difference between the U.S. Justice Department and the NY Attorney Generals Office?

 

[JoeB131]

Romney's Son of Boss fraud

In his key role as chairman of the Marriott board's audit committee, Romney approved the firm's reporting of fictional tax losses exceeding $70 million generated by its Son of Boss transaction.

October Surprise...

 

[JoeB131]

Your a liar and very dishonest! Nothing in your SOURCE says anything about anything other than Bain Capital purchasing KB! No fraud no dividend raiding (which is impossible douche bag)! NOTHING.


Mental Midget, here is a free lesson on venture capitalism. It's about buying struggling companies at a low price, reorganizing, reducing their debt, making them competitive, getting them to cash flow positive, having a positive revenue to debt ratio, having a positive asset to debt ratio, showing a competitive advantage and showing a positive future outlook. Once all that is achieved they sell it at a profit. If all that isn't achieved they take a nice loss.

Now when you are purchasing struggling companies, there is a good chance many CANNOT be turned around! KB was one of them. Walmart, Target and Toys-r-us had too much a grip on the market for KB to have a place.
!

So how does leverage buyouts that force a company to come up with a lot of money to pay off your interest help a struggling company recover.

It's like helping a drowning man by throwing him an anchor.

Bain put up 18 milllion in Cash to get 305 in loans. They then took profits of 85 million two years later. In 2004, they closed down 356 stores and were completely out of business by 2007.

 

[Toro]

New York Attorney General Eric Schneiderman issued a round of subpoenas to five private equity firms back in July. He's investigating a rather common practice in the industry known as the "management fee waiver," whereby fees (which would normally be counted as income, taxable up to 35 percent) are converted instead into investments (later taxable at the lower 15 percent capital gains rate). While it's not exactly illegal, ...

End of story.

Next transparent political hatchet job, please.

 

[Toro]

Gee, I'm sure this isn't political.



lol

So, allegations of criminal activity should be ignored if either a principle or a periphery is involved in a political race?

Please see my above post.

What they did is NOT illegal. Partnerships can structure their management and carry fees anyway they wish.

Smells like BS.

 

[GoneBezerk]

Romney once in power needs to arrest Obamination for this, Fast & Furios, top secret material leaks, political kickbacks in the Solyndra scandal and others, etc.

Obamination needs to spend the rest of his life in Federal prison, along with Chu, Holder, etc.

I think Biden is too stupid to be in on the crimes and Hillary is too busy flying around the world to avoid Obamination and Bill, so she's safe too from jail time.

 

[Two Thumbs]

So, allegations of criminal activity should be ignored if either a principle or a periphery is involved in a political race?

Obama executed a US citizen w/o trial, and you looked the other way.

Your love of al Qaeda terrorists is noted.

Your disregard for the law and Constitution is also noted.

 

[Toro]

So, allegations of criminal activity should be ignored if either a principle or a periphery is involved in a political race?

What "criminal activity?" The Attorney General has admitted that the practice he's investigating is perfectly legal.

For those unfamiliar with how investment partnerships work - and that appears to be most posters in this thread plus the NY AG - partnerships pay to the management company two types of fees, management fees and "carry" or "carried interest" or incentive allocation fees. A typical management fee paid by the investors in a fund ranges from 0.75% to 2%. Incentive allocation fees are usually 20%, but can range between 5% and 30%.

Limited Partners, i.e. investors, expect the guys who run the fund, i.e. the General Partner, to invest in their own fund, usually 1% of the total fund. So for a $5 billion fund, LPs will expect the GP to invest $50 million of their own money. If invested, that $50 million is subject to capital gains taxes.

But $50 million is a lot of money. The top guys in the firm can often afford to plunk that much cash down, but guys further down the food chain can't afford it. So, in lieu of investing $50 million, the partners will grant a management fee waiver worth $50 million, which is invested back into the fund in the GP's name. Had the GP invested their own $50 million, they would be taxed at the 15% capital gains tax rate. But since they have chosen not to invest, they wave the fees charged to the LPs, who then pay a lower fee. The economics are the same.

LPs want GPs to have skin in the game, so they have been pressuring GPs to end this practice, which is why some GPs have given up the management fee waiver. GPs haven't given it up for tax reasons.

There is no law that says partnerships must charge X% on management fees and Y% on carried interest. Partnerships can charge whatever they want. That's why this so-called investigation sounds like political bullshit. Or NY has an extremely ignorant AG.

Also, the article is wrong about management fees being taxed at a 35% rate. What is taxed at a 35% rate is the profits from the management company, i.e. the management fee less all expenses. IOW, the corporate tax rate is taxed on corporate profits, just like any other company.

Carried interest is taxed at the 15% capital gains rate. That is egregious and should be changed. Carried interest should be charged at the normal rate of personal income tax. Carry profits are not gains on the GP's capital. It is a fee charged to the LPs off the capital gains of the LPs, not capital of the GP. Liberals are correct on this one.

 

[Toro]

The "Son of Boss" scheme at Marriott.

Just another libtard lie, libtard liar.

Did Romney enable a company's abusive tax shelter? - CNN.com

In his key role as chairman of the Marriott board's audit committee, Romney approved the firm's reporting of fictional tax losses exceeding $70 million generated by its Son of Boss transaction. His endorsement of this stratagem provides insight into Romney's professional ethics and attitude toward tax compliance obligations.
Like other prepackaged corporate tax shelters of that era, Marriott's Son of Boss transaction was an entirely artificial transaction, bearing no relationship to its business. Its sole purpose was to create a gigantic tax loss out of thin air without any economic risk, cost or loss -- other than the fee Marriott paid the promoter.

This is an entirely fair question.

Many tax shelters were created offshore to generate losses through derivative transactions. At the time, they were backed by legal opinion letters written by law firms who were peddling the structures even though the Department of Justice hadn't given the structures the okay. The DoJ later ruled against many of these structures and forced investors to pay back taxes. I believe a few of the rulings went to court and were upheld.

If I were speculating on why Romney won't release his past tax returns, this may be a reason.