Not even the stench of Sandy's sewage-filled floodwaters can drown out Romney's smelly, smelly taxes.
Calvin Johnson, the tax expert who alleges fraud in Romney's tax returns (diaried here two days ago http://www.dailykos.com/...) published a ten-page paper in Tax Notes on July 30, 2012, describing how Romney got rich, as best he can determine from the coy public record of Bain Capital http://papers.ssrn.com/.... A law professor at the University of Texas, Johnson is a product of Columbia University and Stanford Law School. He has worked in the private sector and at the US Department of Treasury. He was Visiting Professor at the Office of the Chief Counsel of the IRS in 2007, and a Fellow at the Tax Policy Center in 2011.
As he puts it in the introduction to his paper,
The increase in debt that generated Bain’s LBO [leveraged buyout fund] profits was not a very good idea from a national point of view. Corporations with a lot of debt are more fragile than corporations that get their capital through stock. Indeed, the high debt gives shareholders an incentive to move into high-risk transactions because they win when the transaction wins and they shift losses to creditors when the transactions lose. The stock becomes more valuable if the managers bet the company. When a corporation fails because of its high debt, it imposes harms on employees, suppliers, and customers who were not privy to negotiating the debt contract.
The profit from tax deductions from the LBOs is not what is meant when those who make a lot of money are praised. Pretax economic income is associated with making something people really want to buy, or reducing the cost of making or delivering it, with creating jobs and improving the wealth of the nation. The tax deductions, by contrast, are at the expense of the government dollar for dollar, without any increase in the size of the overall pie. With high deficits, the government revenue loss is probably not a good idea. Moreover, when tax deductions cause economic harm by incentivizing high debt and high risk, they reduce the wealth of the nation. Making money with more tax deductions is certainly not illegal or immoral, but it is also not what speakers mean when they speak of duty to God and country.
His letter to the editor published on Monday, October 29, 2012, asserts that Romney deeply and fraudulently undervalued his Bain assets when he transferred them into his childrens' trust and his IRA. It concludes as follows:
Romney made most of his fortune at the expense of the tax system by wiping out corporate tax on the acquired companies. Wiping out tax had nothing to do with improving operating income or jobs. Thus, he made most of his money at the expense of other current or future taxpayers, and while that may be distasteful, it was not illegal. But the misevaluation of his assets - an act which may have defrauded the federal government out of millions of dollars - is not simply playing the game: It is fraud, subject to tens of millions of dollars of penalty.
When you're asking the taxpayers to pay your future salary if you win the elective office you seek, shouldn't they have the right to know whether you've paid all your taxes?
People here at Kos and elsewhere have said more or less the same thing since Romney deigned to release his 2010 tax return. When someone with Johnson's expertise and reputation comes out and says it, Rachel ought to interview him on TRMS.