Romney built a golden IRA while he was at Bain

[cali]

It is one of the most striking elements of Mitt Romney’s financial fortune. He has used the seemingly bland investment vehicle known as an individual retirement account — established by Congress to help average Americans save a modest amount for retirement — to shield at least $20 million and as much as $100 million from initial taxes.

Even the lesser amount would put Romney’s IRA in the top 0.001 percent of all such accounts in the country, according to analysis by the nonpartisan Employee Benefit Research Institute. The extraordinary size of Romney’s IRA has led Democrats to question how he could amass such a fortune given that annual contributions to the fund are strictly limited.

Romney has not provided details about how his IRA grew so large. But Romney associates with direct knowledge about the matter said Bain Capital partners used their IRAs as a pool of investment money, enabling them to make personal investments in Bain deals, many of which earned spectacular returns. Much as a lower-dollar investor might pick mutual funds for an IRA, the Bain partners could make side investments in the firm’s deals and then watch as their retirement funds grew.

Or exploded, in some cases. For example, in one deal for a credit-reporting service known as Experian, Bain tripled its $100 million investment in just seven weeks. This could have resulted in a 40 percent tax on short-term gains for partners who made personal investments in that deal. But by using funds within an IRA to make the investment, Bain partners would not have to pay any tax on their personal stake until the funds are withdrawn upon retirement. While Romney has not said whether he used the IRA in that particular deal, his associates said the practice was widely used at Bain.

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http://www.boston.com/news/politics/articles/2012/08/11/mitt_romneys_ira_is_unlikely_centerpiece_of_wealth_and_tax_avoidance/

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[safeinOhio]

1. Silly rabbit,

everyone knows taxes are for little people.

[Ilsa]

2. At some point, that money will be taxed.

No wonder he wants to lower earned income rates for millionaires. Either he or his brats might have to fork over their fair share to help pay for part of the commons.