Tuesday, January 24, 2012

Romney's Timed Tax Release Inflames Issue

Romney's carefully timed (morning-after-first-Florida-debate, pre-President's-State-Of-The-Union-Speech) release of his 2010 tax return is certain to inflame an important issue--carried interest income compensation for private equity executives, which allows them to treat income earned from financial engineering and money managing as capital gains instead of as ordinary income. Click here for the story, a key excerpt of which appears below.

At issue is the U.S. tax code’s treatment of carried interest, or the share of profits that partners in private equity firms, hedge funds and real estate developments receive as the bulk of their compensation. That income is taxed at the 15 percent capital gains rate rather than at ordinary income rates of as much as 35 percent, although many tax specialists say it represents compensation for labor.

If Romney thinks he can confuse the public--get retired folks in Florida, for example, to equate carried interest with interest income from savings--he's in for a rude awakening. The American people are about to get an education regarding the secretive private equity world, and they are not going to like what they learn. The exposure will greatly upset the publicity-shy (for good reason) PE and hedge fund barons. But they have Romney and the Republican Establishment to thank for the disturbance. His quest for power and the Establishment's arrogant anointing of him as the presumed GOP candidate has put the mega-rich money manipulators in the spotlight in a most menacing way--for them.

Ignore the national disinformedia. The White House is rooting for Romney to win the Republican primary race. Romney, not Newt Gingrich, is the gift that can keep on giving … right through Election Day.

Further Memo to the Republican Establishment: Stop believing your own press releases. Romney's "success" does not inspire ordinary Americans. To the contrary; the more they will learn about the ways in which he made and has held onto his fortune the angrier they are likely to become. Hs isn't a business hero. He isn't any kind of hero. There is nothing heroic about him. Genuine heroes uplift regular folks, make them feel taller and stronger. Romney by definition diminishes them and their achievements, makes them feel small and insignificant, stupid, in some ways, for actually believing in and not knowing how to manipulate and profit mightily from a system that seems increasingly rigged in favor of a select few.

Gingrich may remind some people of a high school principal who tends to talk too much, or the high school history teacher or college professor who gave you a B when you thought you really deserved an A. But that isn't so bad compared against Romney. For way too many Americans, Romney seems like the CEO who fired them … and, adding insult to injury, tried to convince them that it was for their own good.

For other Americans, Romney is also the preppy college kid who picketed for the Vietnam War draft while knowing that he could claim an exemption that would keep him from ever serving in the military. Click here for that story. The idea that this creepy, self-righteous hypocrite is cut out to be the Commander-in-Chief boggles the mind.

A secretive, super-rich, pro-draft, draft dodger--the epitome of electability in the eyes of the Republican Establishment. Eisenhower must be turning in his grave.