Monday, July 9, 2012

I'm not a crook, my friends

Mittens went investing, and boy did he do good. When he says he’s a really, really smart businessman, he ain’t kidd‘n. Seems his campaign disclosure statement says that he has an IRA that has a balance of between 20 million and 100 million dollars. Wow! 

The really fantastic part is that he’s only had it for 15 years, and the most you can invest in an IRA is $6000 per year for a total at the end of $90,000. Mind you, that’s the balance at the end and not at the beginning, he only started with $6000. What a fantastic return on investment. 

You don’t suppose he got swindled by Bernie Madoff and the balance in his account is really zero? Poor, poor Mittens….  I think not.   

The only way you could turn $90,000 into $20 million or five times that, is by some sort of money laundering scheme. There is absolutely no legitimate way to get a 1000 to 1 return on investment. This would ambitious, or rather foolish, even for a mob book keeper as the IRS should be all over this. 

You wondered why Willard needed all the offshore accounts? Apparently somebody took huge losses, say a company like Bain, and the profits ended up in Romney’s tax sheltered account. Imagine that. Did Bain write off the losses against its taxes? Sure, why not? 

The FBI and the IRS employ thousands of very bright individuals that do nothing but ferret out this sort of thing, and put people in prison for long terms. But, I have the feeling that the way the possible next President of the United States did it was all legal. Or rather this behavior has been de-criminalized by Reagan and the stooges for the billionaires that have been in charge since. As I recall Richard Nixon very nearly got caught doing something very similar involving one of his cronies, so there is precedent. 

The quote updated would be, “I am not a crook, my friends“. Things don't change that much, they just get made "legal".

From the news: Florida has closed the only public hospital dedicated to tuberculous treatment in the US. Republicans want to save money by closing the facility. The health service is putting patients in motels to keep them on their medications, or they are on the street. People that had previously been confined in rooms with separate air and water supplies to contain the highly contagious disease. Patients that were deemed too dangerous to have visitors are now staying in the local motel, if they aren't out on the street coughing on passersby. 

This is likely another move to privatization, or maybe just stupidity. The private sector can isolate and treat TB patients effectively, just like private contractors provide services for the military, instead of using GIs, at five times the cost.

Never mind the tendency of these contractors to not be satisfied with an 80% profit causing them to cut corners. Drug resistant TB is already a problem, lets just incubate a few new strains until we get something worthy of Stephen King novel.     


Anonymous said...

Actually the most Mittens would have been able to put into his IRA during his Bain years would have been $2000 per account (one for each Mittens and his wife). It was only after 2001 that the IRS began to gradually allow you to place more money in these qualified accounts-and initially that was for people over 55.

Now I believe that the Vanity Fair article did not get their facts entirely right. Mittens would not have had an IRA with Bain, but rather a 401(k) which does allow contributing much more than an IRA, but not nearly the amount that would have enabled Mittens to amass $100M. Only after Mittens left Bain would he have rolled-over the 401(k) into a "Rollover IRA" (i.e. one qualified account into another qualified account).

Also, according to the Vanity Fair article, the way Mittens possibly amassed this amount in his IRS was through Bain's acquisition of other companies. Bain would assign two types of stock-A and L shares. The A shares would be drastically undervalued and placed in tax-advantaged vehicles like a 401(k). The L shares would be at maximum value (I guess to reflect the company’s market cap) as well being high-dividend preferred stock with frozen payouts.

The advantage of placing the A shares in a 401(k) would allow the shares to grow and incur dividends tax free. Even when the shares were sold, no taxable event would occur because the shares are inside the 401(K) (or the IRA after he left Bain). Do this over and over again with the countless of companies Bain
“acquired” it is possible he was able to “earn” this return. Now my guess is Mitt has yet to take money out of this account-allowing it to grow to its incredible amount. He will have to begin withdrawals after he turns 70 1/2 (about 5 percent in the first year) and continue to make them until he dies. This will be a taxable event at the highest earned income rate of 36 percent (unless Obama grows a pair and raises this rate is back up to 39%).

Then again, if Mitt gets elected he will be able push legislation in Congress to change these laws in order to favor his personal situation (e.g. change IRA withdrawals from earned income to capital gains and then eliminate all capital gains taxes). I am sure though Mittens would NEVER do such a thing. After all, he’s been SO honest up until now…

Anonymous said...

Southern Africa has been doing a dandy job of incubating TB. A year or so ago there was a notice the CDC was concerned by a virulent TB strain resistant to all known drugs that killed people within two weeks. Perhaps that strain was so toxic it managed to kill itself off before it could find a new host and spread.

From the interest in the news, maybe it never happened. Don't want to scare people but such things are possible, lurking outside your door.