.@mittromney Romney's Success at Bain Capital: The Scam as Business Model #p2 #tcot @barackobama

"Private equity companies like Bain Capital are not primarily about producing wealth. They profit largely by siphoning off wealth created elsewhere in the economy. There are many different ways in which this diversion of wealth is accomplished.

The simplest and most common trick is gaming the tax code. It is absolutely standard practice for private equity firms to immediately load up the companies they acquire with debt. This has two benefits for the PE companies. First, it allows them to get most of their money back right away. They end up with a heavily leveraged company, where the PE company is still in control, but has little of its own money at risk.

The other benefit is that the interest on the debt, unlike dividends paid out to shareholders, is tax deductible. This means that even if the PE company does nothing to improve the operations of a company it acquires, it will increase its profitability by reducing its taxes.But each of these people could take credit for building companies that produced wealth. That is not the case with Mitt Romney."

rest at http://truth-out.org/news/item/11316-romneys-success-at-bain-capital-the-scam-as-business-model