In releasing his 2010 and estimated-2011 tax returns, the Romney campaign acknowledged that Mitt Romney made nearly $13 million in “carried interest” — “money that’s paid out to fund managers in return for their labor.” Rather than treating this money as regular income, it’s comes out of a company’s profits and is taxed at the 15% capital gains tax rate — hence, it’s a ‘loophole.’
So, how much did this loophole save Romney? According to experts at the Center for American Progress, around $2.6 million or 20%.
While Romney broke no laws when he collected the $13 million in carried interest, it’s a great, real-life example of the wealthy benefiting from the current tax code. Romney also declines to say specifically whether the loophole should be removed from the tax code, saying only that we need comprehensive reform that will address a lot of issues.
