Letter: Don't allow firms to evade taxes
The article "AG eyes investment firms' taxes" [News, Sept. 3] is a punch in the gut to anyone who pays his fair share of taxes. It details how the New York State attorney general is probing whether investment firms, including Bain Capital, which was founded by Mitt Romney, use the practice of converting fees collected to manage investors' accounts into fund investments. Doing so results in a 15 percent tax rate compared to the top rate of 35 percent.
Although the inquiry is not focused on the time Mitt Romney ran Bain, it illustrates tactics used to avoid paying taxes. To label management fees as fund investment monies to reduce the tax liability is nothing short of fraud. When one collects fees for managing something, whether it is for an investment fund or for a client in any number of professions, it is considered ordinary income and subject to being taxed as such.
But the most disturbing part of the article is that while some tax experts believe this strategy is illegal, others said it was common and proper. That something is done commonly does not make it proper or legal. Bain saved more than $200 million in taxes using this strategy. Let's hope the attorney general can put an end to such practices.
Mark R. Herzog, Rockville Centre