NY AG Subpoenas Tax Records of Financial Services Firms, Including Romney's Bain Capital

The lede of an article Saturday September 1 in the New York Times:

The New York attorney general is investigating whether some of the nation’s biggest private equity firms have abused a tax strategy in order to slice hundreds of millions of dollars from their tax bills, according to executives with direct knowledge of the inquiry.

The firms, which include Bain Capital, appear to have treated/converted their management fees as investments. This allows the income from them to be treated as capital gains rather than ordinary income. That means they're taxed at 15% rather than 35% and may not be subject to Medicare taxes.

I've commented previously on Romney's and Bain's suspect movement of tens millions to offshore accounts and concerns about his non-released tax returns here, here, here and here.

The New York Attorney General will definitely come under fire for investigating this and some Republicans and pundits will claim the investigation is politically motivated. The suggestion not to investigate due to politics, of course, is also patently tying politics to the investigation, so there's no easy answer. I think the tax treatment is suspect and it is appropriate to investigate; it's not a frivolous investigation.  The New York AG is one of the few AG's in the country who has this type of broad investigative power, by the way.