So he’s turning capital gains into ordinary income - for either him or his children?
What’s the “scandal” here?
Anyway, good argument for private retirement accounts.
“Mr. Romney’s reliance on a tax-deferred retirement plan for so much of his wealth could end up costing him. An IRA allows a small immediate tax savings, plus deferral of taxes, he explains. But income from the account, when eventually withdrawn, will be taxed at the higher ordinary-income rate, not the lower capital-gains rate that might have applied if Mr. Romney had held the investments outside the fund.”
As a matter of hindsight considering the growth in the IRA portfolio he may regret having placed the shares in his IRA potentially converting what would otherwise have been a 15% cap gains rate to a higher 35% ordinary income rate when he or his kids withdraw it if they inherit it.
It is illegal to put into a retirement account of any type capital gains. Moneys entered into a retirement account has to come from earned income from labor (nothing else).
Once the money is in a retirement account you can invest it, but ONLY in IRS approved investments.
The main reason that Romney is so hesitant when discussing his taxes is probably not his 1040 forms. What really worries him is probably doing some gray or illegal staff to get to an amount of 20-100Millions in his retirement accounts.
There are severe restrictions on how much can be put into a retirement accounts, there is also a limit on the total yearly amount that can be put into retirement (all types summed up Benefit plans, defined benefit plans...)
Taking such things into account it looks fishy that he was able to accumulate 20-100M $ in his account.