More on the John Edwards Shelter

RothCPA takes issue with my characterization of Romney’s S Corp income as a John Edwards shelter:

While much is uncertain about how much S corporation income should go between K-1 income and W-2 income, it is certain that it usually isn’t all compensation when capital investments are involved. To the extent that that Bain Capital Inc. owns passive interests in Bain Group investments, it certainly isn’t disguised wages.

via Tax Roundup, 9/26/12: Romney vs. John Edwards; Also: low taxes, if you don’t count some taxes. « Roth & Company, P.C.

I understand what the author (the thoughtful Joe Kristan) is getting at, but Bain Capital Inc. is the management company, not the GP of the funds.  So the passive investments are held in entities like Bain Capital Partners V, Bain Capital Partners VI, etc.  Bain Capital Inc. receives nothing but management fee income and maybe deal fee income, as far as I can tell.  Not passive investments.