Here's How Mitt Got out of Paying His Taxes

In a recent "High and Low Finance" column in the "New York Times" entitled "A Tax Tactic That's Open to Question", Floyd Norris explains exactly how Mitt Romney and other plutocrats like him were able to finangle the law and pay such low taxes--unlike you and me.

It's a technique called "carried interest."

Read more to understand why little guys like you and me can't get away with this.

"The principal means [Romney] used to pay low taxes on his hundreds of millions of dollars in income was the technique known as carried interest, which allows managers of private equity funds [not little guys like you and me--Jagor] to treat most of the fees they receive for running the funds as capital gains rather than ordinary income.

"The technique strikes some — including President Obama — as outrageous, but it is legal under current law. Unless and until the Congress changes the law, Mr. Romney has every right to take advantage of the technique."

But there may be trouble in store for Romney and other plutocrats like him who have getting away with fiscal murder and cheating Uncle Sam. Norris concludes:

"Mr. Romney’s former colleagues in private equity may come to regret his candidacy, whether or not he wins. Few in the public understood this particular maneuver before the Bain reports were disclosed. Now many do. If and when Congress decides to reform the tax law, this area is likely to be a prime target."

Jagor