IRS data shows that while Bruce Rauner is one of the 11,000 wealthiest tax filers in the United States, most of the money he made in recent years was taxed at less than half the top rate for the wealthy, a Chicago Tribune analysis shows.
For the most part, he was taxed at a 15 percent rate, thanks to a strategy that offers large tax savings on Rauner’s share of investment fees paid to GTCR, his investment firm. While such a strategy is allowed, it has come under IRS scrutiny.
The Tribune’s analysis shows that Rauner’s “financial profile is one driven by tax-reducing strategies often out of reach for those of more modest means.”
RELATED: Rauner discloses $53 million in income for 2012
Some of those strategies include:
- Reporting income as capital gains instead of regular earnings.
- Taking business losses for three years, which “freed Rauner from paying any Social Security or Medicare taxes in 2010 and 2011, despite his reporting healthy earnings in other income categories and listing a combined adjusted gross income for those years of about $55 million.”
Rauner told the Tribune his returns “very carefully” followed the tax code.
My income is based upon a whole lot of things. It’s capital gains through carried interest. It’s through management fees I get across all the funds, Rauner said. I’ve been a very large owner in every GTCR fund over 32 years. I also have other personal investments, some of which generate ordinary income of various types, some of which generate capital gains, some of which generate interest income. Breaking apart all that detail is hard to do.
Via Chicago Tribune
