Posted on 01/12/2012 6:56:39 PM PST by Steelfish
Mitt Romney No Stranger To Tax Breaks, Subsidies Bain Capital profited from a steel company that got them, and he used them to attract business when he governed Massachusetts
By Matea Gold, Melanie Mason and Tom Hamburger January 12, 2012
Reporting from Washington— As Mitt Romney defends his record running a private equity firm, he frequently points to a fast-growing Indiana steel company, financed in part by Bain Capital, that now employs 6,000 workers.
What Romney doesn't mention is that Steel Dynamics also received generous tax breaks and other subsidies provided by the state of Indiana and the residents of DeKalb County, where the company's first mill was built.
The story of Bain and Steel Dynamics illustrates how Romney, during his business career, made avid use of public-private partnerships, something that many conservatives consider to be "corporate welfare." It is a commitment that carried over into his term as governor of Massachusetts, when he offered similar incentives to lure businesses to his state.
Yet as he seeks the GOP presidential nomination, he emphasizes government's adverse effects on economic growth.
(snip) Bain Capital began looking at investing in the steel start-up in late 1993. At the time, Steel Dynamics was weighing where to locate its first plant, based in part on which region offered the best tax incentives. In June 1994, Bain put $18.2 million into Steel Dynamics, making it the largest domestic equity holder. It sold its stake five years later for $104 million, a return of more than $85 million.
As Bain made its investment, the state and county pledged $37 million in subsidies and grants for the $385-million plant project. The county also levied a new income tax to finance infrastructure improvements to benefit the steel mill over the heated objections of some county residents.
(Excerpt) Read more at latimes.com ...
drip, drip, drip....
I am not a Mitt Romney fan, as my history will surely attest.
I have to ask, though: since when is taking a tax break a bad thing?
The idea that a tax break is a bad idea or wrong, presupposes that the government or someone else had more of a right to my money than I did.
I earned my money, just as Romney did his.
This is a ridiculous, silly, super-duper liberal argument.
In before crypto-Mittbots infiltrate the thread explaining how these weren’t really bailouts, and proclaiming self-righteous indignation that “capitalism” is being undermined.
By Pat Garofalo on Jan 9, 2012 at 9:25 am
2012 GOP presidential frontrunner Mitt Romney, who has a large lead in the polls heading into the New Hampshire primary tomorrow, has been taking heat from both Democrats and his Republican challengers for his time at Bain Capital, the private equity firm that he headed. Bain’s modus operandi was to invest in companies, leverage them up with debt, and then sell them off for scrap, allowing Bain’s investors to walk away with huge profits while the companies in which Bain invested wound up in bankruptcy, laying off workers and reneging on benefits.
Last week, Reuters profiled one company, Worldwide Grinding Systems, that went belly up after Bain invested in it. The company not only lost 750 jobs, but the federal government had to come in to bail out its pension fund, while Bain walked away with millions in profits.
And according to an analysis by the Wall Street Journal, this was far from an isolated incident. In fact, 22 percent of the companies in which Bain invested wound up either in bankruptcy or shutting their doors entirely, while Bain itself has made billions of dollars for its investors:
The Wall Street Journal, aiming for a comprehensive assessment, examined 77 businesses Bain invested in while Mr. Romney led the firm from its 1984 start until early 1999, to see how they fared during Bain’s involvement and shortly afterward.
Among the findings: 22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses. An additional 8% ran into so much trouble that all of the money Bain invested was lost. [...]
The Journal analysis shows that in total, Bain produced about $2.5 billion in gains for its investors in the 77 deals, on about $1.1 billion invested. Overall, Bain recorded roughly 50% to 80% annual gains in this period, which experts said was among the best track records for buyout firms in that era.
Adding insult to injury, Bain would hide its profits in tax havens, not even paying the rate it was supposed to on the profits it made laying off workers.
Federal aid
The US Pension Benefit Guaranty Corp, which insures company retirement plans, determined in 2002 that GS (Steel) had underfunded its pension by $US44 million. The federal agency, funded by corporate levies, stepped in to cover the basic pension payments, but not the supplement the union had negotiated as a hedge against the plant's closure.
For Joe Soptic, who worked at the plant for 28 years, that meant a loss of $US283 per month, about 22 per cent of his pension. Others lost up to $US400 per month, according to documents supplied by the union.
Comparatively, the GS bailout was one of the pension guarantor's smaller hits. The federal fund swung from a $US7.7 billion surplus to a $US3.6 billion deficit that year as it struggled to cover bankruptcies in the steel and transportation industries. The failure of LTV Steel, for example, cost the agency $US1.9 billion.
The agency's woes prompted Congress in 2006 to require companies to contribute more toward their pensions. Press accounts said this change accelerated the shift away from pension plans toward 401(k)s and other defined-contribution retirement plans that offer less security for workers.
” am not a Mitt Romney fan, as my history will surely attest.
I have to ask, though: since when is taking a tax break a bad thing?
The idea that a tax break is a bad idea or wrong, presupposes that the government or someone else had more of a right to my money than I did.
I earned my money, just as Romney did his.
This is a ridiculous, silly, super-duper liberal argument.”
Its not the tax breaks that bothers conservatives, its the stuffing the pockets of politicans with millions and millions of dollars to buy the tax breaks that makes them angry. Its the selective favortism that the money buys, its the bailouts, its the cronyism. Businesses have NO Business being in bed with gov. officals, seeking and buying political favors.
If its legal and your competitors do it, you almost have to to survive. I agree with the argument that it (buying influence) should not be allowed, but if is allowed, you do what you have to do to stay competitive.
I find the current arguments by some candidates that so-and-so (almost always Romney, since he's the front runner) is exclusively involved in this stuff, ridiculous and distasteful.
It amounts to class warfare, and it will come back to bite us hard in the run-up to the general when the Democrats put the quotes back in the mouths of the people who said it against whomever gets the nod.
I was listening to the Laura Ingraham Show this afternoon, and she was interviewing Rick Perry. It was a pretty friendly interview, but at one point, she mentioned that he'd been the recipient of millions of dollars in campaign money from the same kind of venture capitalist firms that Romney ran. I didn't actually hear all of his response, but he was having trouble defending himself.
And then I read the interview with Newt Gingrich taking about not being able to afford a vacation home in New Hampshire because he's not rich. First, he's worth about 6 million dollars by most estimates. Second, he has previously had a half-million dollar line of credit at Tiffany. He could or should be able to afford a vacation home in New Hampshire.
http://www.freerepublic.com/focus/f-news/2828830/posts
And third, I know many people who have vacation homes in nice places. We have several in our extended family. A hunting cabin, a home in a ski resort town, and a lake house among them. We're not rich people, but we have a family of very hard working people. The attitude that only rich people have vacation homes is silly. My uncle, a veteran, worked hard every day of his life to buy a hunting cabin and would not appreciate being told he is elite. He's the child of farmers and miners.
Is this the sort of message we want to send to people like my uncle?
And honestly, Romney has a giant target on his back of his own making with all the moronic, nasty, stupid, dishonest things he's done over the years. There should be no reason to engage in class warfare when you're talking about a duplicitous weasel like Mitt Romney.
Who TF cares? if a city, municipality or state want to incentive a business to stay or relocate then they have made the decision they believe is in the best interest of the citizens.
OwS syndrome and i am damn Nowsick and tired of defendimg this A-holen.
Now I hope he does break his ulna and has to pullout just so I don’t have to hear anymore of this synthetic crap.
Stoopid Stoopid Stoopid!!!!
Who TF cares? if a city, municipality or state want to incentive a business to stay or relocate then they have made the decision they believe is in the best interest of the citizens.
OwS syndrome and i am damn Nowsick and tired of defendimg this A-holen.
Now I hope he does break his ulna and has to pullout just so I don’t have to hear anymore of this synthetic crap.
Stoopid Stoopid Stoopid!!!!
“Its not the tax breaks that bothers conservatives, its the stuffing the pockets of politicans with millions and millions of dollars to buy the tax breaks that makes them angry. Its the selective favortism that the money buys, its the bailouts, its the cronyism. Businesses have NO Business being in bed with gov. officals, seeking and buying political favors.”
And the fact that Mitt believes in our tax code. He just wants a few modifications. That in itself makes him nothing more than part of the problem and we want it all fixed.
Also, Mitt Romney is just wierd.
If a State wants to provide tax breaks, subsidies, bailouts or whatever that is a completely DIFFERENT THING than the Federal government doing it.
And I’m not voting for Romney.
Targeted tax brakes, where government picks so-called "winners" by giving some people some of their tax money back is not a free market principle.
State governments giving targeted tax cuts is not a free market principle.
Right.
I don’t think it’s free market either, but it is up to individual states (or counties or cities) to decide this matter. State’s can be as anti-free market as the citizens of that State allow.
I think the story is trying to conflate this practice at the State (or lower) level with the Federal level.
“Agreed, but once they are available, shouldn’t everyone who can take advantage of them do so? And as long as it is legal, is it wrong to do so if your competitors do?”
I don’t agree with that at all. Their are lots of businesses that play fair and play by the rules and are very successful.
What makes u think this is legal? All of these folks should be in jail, that’s the point. What Bain captial, Mitt Romney and the politicians are doing is called “graft”. Everyone of them should be in prison, the politicans for taking bribes and the beloved capatialist for supplying the money to buy the favors.
Why do u think people are so upset? Because of crony captialism.....! And then people like Rush Limbaugh goes on radio for three hrs. everyday and defends this stuff and calls it free enterprise. Rush is an idiot.
“If its legal and your competitors do it, you almost have to to survive. I agree with the argument that it (buying influence) should not be allowed, but if is allowed, you do what you have to do to stay competitive.”
IT NOT ALLOWED, ITS CALLED CORRUPTION, CORNY CAPTIALISM IS CORRUPTION AND ILLIEGAL. We just have a bunch of crooks in office who write the rules and that’s what keeps them out of jail. That doesn’t make it right or leagal. It is sickening to watch conservative icons and conservative media defend this marxist crap and call it free enterprisr.
I find the current arguments by some candidates that so-and-so (almost always Romney, since he’s the front runner) is exclusively involved in this stuff, ridiculous and distasteful.
Romny isn’t the only one involved but he is running for president. I will do all I can to derail this marxist scumbag from getting into office. Obama, Reid, Pelosi, and even Rush Limbaugh are involved. All of them are using their power and money to protect and promote crony captialism. Don’t believe me go to Rush’s website. There’s more marxist propaganda there than you would find at PRAVDA....! You have to be marxist in ur thinking to defend, protect, and promote Bain captial, Mitt Romney, and crony captialism.
“It amounts to class warfare, and it will come back to bite us hard in the run-up to the general when the Democrats put the quotes back in the mouths of the people who said it against whomever gets the nod.”
Nice try but that dog want hunt....! It “ain’t class warfare, its crony captialism.” Its already biten us in the butt. Conservatives have alrady surrendered their principles and started promoting, protecting, and defending crony captialism in the form and persons of Bain Captial and Mitt Romney. Welcome to crony captialism, the new free enterprise.
“I was listening to the Laura Ingraham Show this afternoon, and she was interviewing Rick Perry. It was a pretty friendly interview, but at one point, she mentioned that he’d been the recipient of millions of dollars in campaign money from the same kind of venture capitalist firms that Romney ran. I didn’t actually hear all of his response, but he was having trouble defending himself.”
I bet he was. He’ll get NO sympathy from me.
And then I read the interview with Newt Gingrich taking about not being able to afford a vacation home in New Hampshire because he’s not rich. First, he’s worth about 6 million dollars by most estimates. Second, he has previously had a half-million dollar line of credit at Tiffany. He could or should be able to afford a vacation home in New Hampshire.
I could care less about his wealth. I’m just not into “class warfare”, I’m into fighting people who go around defending crony captialism and then having the gumption to call it free enterprise.
http://www.freerepublic.com/focus/f-news/2828830/posts
And third, I know many people who have vacation homes in nice places. We have several in our extended family. A hunting cabin, a home in a ski resort town, and a lake house among them. We’re not rich people, but we have a family of very hard working people. The attitude that only rich people have vacation homes is silly. My uncle, a veteran, worked hard every day of his life to buy a hunting cabin and would not appreciate being told he is elite. He’s the child of farmers and miners.
I’m glad u guys can afford such things, more power to ya..! I don’t care about ur wealth and what u own that’s none of my business. What is my business is when company’s and politicans like Mitt Romney and Bain Captial can run to the halls of congress with cases full of money and buy special favors. That’s corny captialism and thats the war I’m fighting.
Is this the sort of message we want to send to people like my uncle?
The only message I’ll send to ur uncle is to vote for someone other that a marxist and a crony captialist like Mitt Romney.
And honestly, Romney has a giant target on his back of his own making with all the moronic, nasty, stupid, dishonest things he’s done over the years. There should be no reason to engage in class warfare when you’re talking about a duplicitous weasel like Mitt Romney.
We do agree on one thing. Romney and his minions in conservative media are weasels. And, as I said, it “ain’t” class warfare, its a war against crony captialism.
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