Mitt Romney said large corporations can capitalize on “low-tax havens” to save money, as the presumed Republican presidential nominee promised to ease U.S. regulations to help beleaguered small businesses.
Big businesses “know how to find ways to get through the tax code, save money by putting various things in the places where there are low-tax havens around the world for their businesses,” Romney said last night at a fundraising event in Minnetonka Beach, Minnesota. “But small business is getting crushed.”
Democrats have raised questions about Romney’s own use of tax havens. He became a millionaire running Bain Capital LLC and invested in funds run by his former firm that used tax strategies unavailable to most Americans. The techniques were underscored yesterday as the website Gawker released 950 pages of Bain documents.
Romney, 65, who will accept his party’s presidential nomination at the Republican National Convention in Tampa, Florida, next week, called attention to that tax strategy last night.
Romney, whose personal fortune is estimated to be as high as $250 million, told supporters at the Minnesota event that, if elected, he would ease government regulations that hurt small businesses.
“Big business is doing fine in many places,” he said. “I’m going to champion small business.”
Romney’s comments called to mind remarks by President Barack Obama when he said June 8 that “the private sector is doing fine.” Republicans criticized Obama for being out of touch with the difficulty the economy is having recovering from recession.
Even before his comments last night, Romney’s campaign faced a fresh challenge presented by Gawker’s disclosure of the Bain documents. Romney, who has said he paid a tax rate of at least 13 percent over the past decade, also has balked at releasing more than two years of federal tax returns and Democrats have been questioning his refusal to provide the information.
The newly released Bain records show that Romney took advantage of investments with the firm that achieved a low tax rate, for example, by engaging in what are known as management-fee conversions or fee waivers.
Bain Capital Fund VII LP disclosed in a 2009 report that the general partner in the fund had in the past waived management fees and converted those fees into an interest in the fund called a “priority profit share.” That had the effect of turning fees that would be taxed at ordinary income rates, as high as 35 percent, into capital gains, taxed at a rate of 15 percent.
Alex Stanton, a Bain spokesman, released a statement that said: “The unauthorized disclosure of a number of confidential fund financial statements is unfortunate. Our fund financials are routinely prepared by auditors and demonstrate a commitment to transparency with our investors and regulators, and compliance with all laws.”
The crowd of more than 300 people in Minnesota paid between $2,500 and $50,000 per person to attend the fundraiser.
“Governor Romney has long said we need to simplify the tax code, close loopholes and create a more level playing field for American businesses,” Andrea Saul, Romney’s spokeswoman, said in an e-mail.