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How Mitt Romney's Bain Capital investments benefited from the tax code

Republicans have sought this week to turn Mitt Romney's tenure as a Wall Street buyout specialist into a political asset, touting his record as the former head of investment firm Bain Capital. They've also spent the week championing the virtues of individual ambition and meritocratic achievement, proclaiming "We built this!" the theme of the convention.

But private equity firms like the one Romney led have benefited considerably from government subsidies, as the chart above demonstrates. Bain Capital benefited considerably from the tax code's preference and subsidy for debt-financed leveraged buyouts, as opposed to investments funded with equity.

According to data published by the White House in February, new investments funded with equity are taxed at an average effective rate of 36.8 percent. Investments funded by debt, however -- the types of investments private equity firms like Bain Capital specialize in -- receive a slight subsidy, of about four percent.

The tax code favors and encourages the use of debt, over equity, to finance investments. And Mitt Romney made considerable use of that particular tax anomaly as the head of private equity firm Bain Capital.

Sal Gentile ( @salgentile ) is a segment & digital producer for Up w/ Chris Hayes .