Political Animal

Blog

January 19, 2012 8:00 AM Romney’s offshore accounts draw scrutiny

By Steve Benen

With Mitt Romney still refusing to release his tax returns, we can only speculate as to why he’s so afraid of disclosure. The widely held assumption has been that the Republican frontrunner is embarrassed by his “15% problem” — the multi-millionaire takes advantage of existing tax loopholes to pay lower tax rates than millions of middle-class workers.

But that’s not the only thing Romney’s returns might show. Reuters’ Sam Youngman reported on a related issue:

His vast fortune is invested in dozens of funds linked to Bain Capital LLC, the powerhouse private equity firm he co-founded and led for 15 years. Several Bain funds have offshore connections and take advantage of tax breaks used only by the U.S. financial elite.

His tax returns could shed light on how Romney and Bain use offshore strategies to avoid taxes, said Daniel Berman, a former U.S. Treasury deputy international tax counsel and now director of tax at Boston University’s graduate tax program.

Bain funds in which Romney is invested are scattered from Delaware to the Cayman Islands and Bermuda, Ireland and Hong Kong, according to a Reuters analysis of securities filings.

Greg Sargent followed up with Berman, who added this may help explain Romney’s intention to maybe release one year’s returns, but keep previous years secret.

“It is interesting that he is offering to release tax returns that have not yet been filed — he may have anticipated this and done some restructuring of his investments in time for them to be reported on the 2011 return,” Berman said.

“The fact of participating in certain offshore structures would have to be disclosed,” Berman continued. “And it could be that he’s disinclined to release past returns because they very well may disclose that he participated in offshore investment structures.”

It’s worth clarifying that no one has accused Romney of doing anything illegal. Plenty of very wealthy Americans take advantage of offshore strategies. That’s not a crime.

For that matter, without more information, we don’t know what kind of tax benefit, if any, Romney enjoyed from offshore accounts.

But it doesn’t exactly help paint a picture of Romney as a “man of the people,” and it serves as a reminder of the importance of the tax returns the former governor is so eager to keep hidden. It now appears we have a Republican frontrunner who amassed a vast fortune after laying off thousands of American workers, wants to give himself another tax cut, owns multiple luxury homes, and stashes cash in the Caymans — all while pursuing an agenda that would make things tougher on American’s working class.

It’s not surprising, then, that the National Review wants those returns immediately: “It is critical that Romney release his tax records now, that voters might ‘take a look and decide if we’ve got a flawed candidate. We know that should Romney become the nominee, he will be criticized over the sources of his wealth and will have to effectively respond. Republican primary voters deserve to see whether he can do so before they vote.”

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.

Comments

Post a comment
  • Brenna on January 19, 2012 8:12 AM:

    It is critical that Romney release his tax records now, that voters might take a look and decide if we've got a flawed candidate..."

    Right. And if voters decide Mittens is flawed, they have 3 other clowns they can vote for.

    Rev up your engine Jeb Bush.

  • Danp on January 19, 2012 8:12 AM:

    It's interesting to compare and contrast this with the Birther conspiracies. On the one hand, there is no evidence that Obama was born outside Hawaii and there is no relevance to policy. Here it's actually more important to know what tax advantages Romney had available to him than whether he actually used them. The policies he advocates suggest that he would use every single one of them. What is actually in his returns is almost entirely irrelevant. If he actually did benefit from off-shore tax havens, it merely puts an exclamation point on the issue. But even if he didn't, the laws allow for it, and his policies would only exaggerate that fact.

    Also, he said he doesn't think anyone should have to pay more than 25% in income taxes. Someone might ask him who, exactly, he thinks should pay so much more than he.

  • j on January 19, 2012 8:21 AM:

    Why does Romney hate the USA so much that he refuses to pay his fair share of taxes.
    Warren Buffet was delighted to pay his first payment to the US on his offer to match any GOP'er who would make a payment to the IRS - it is great news that he got one!

  • DAY on January 19, 2012 8:26 AM:

    It is curious-and interesting- that two disgraced former candidates can contribute to this year's primary debate.

    John Edwards talked of "Two Americas". A silver spoon one, where taxes- if paid at all!- are 15%. And the Tupperware America, where we have no choice at all- our taxes are withheld by our employers, and at a rate much higher than 15%.

    And then there is Sarah Palin, lecturing us on "vetting" the candidates! So, instead of cruising to a coronation with complicit assistance by a nonfunctional media, we have dirty laundry overflowing our hampers.

    Perhaps America CAN learn from the past!

  • Lou Gravity on January 19, 2012 8:29 AM:

    It was pretty obvious that if he admitted paying about 15% that the real figure would be much lower. Yet the media jumped right on the 15% as if that were the story.

  • Oh my on January 19, 2012 8:58 AM:

    we don't know what kind of tax benefit, if any, Romney enjoyed from offshore accounts.

    If any? Oh, Steve. lol.

    When Romney said, "my taxes are probably closer to the 15%", he wasn't rounding down. If you can use exotic loopholes like offshore tax structuring, then you're so hyper-rich that a 15% tax rate seems like a quaint, bygone era.

  • John Dillinger on January 19, 2012 9:06 AM:

    Obama wants the Bush tax cuts to expire, Romney doesn't. Obama has released his tax returns going to back to the last full year of President Clinton, thus providing a basis to compare taxes before and after the Bush cuts. The Democrats should be pounding the drums that Romney needs to do the same.

  • rikyrah on January 19, 2012 9:08 AM:

    I haven't seen this asked yet, but W-T-F did Romney think he was gonna do in 2008, if he had won the GOP Nomination? did his arrogant ass really think he wasn't gonna have to release his tax returns?

    and, he's been running since 2007...this mofo is actually arrogant enough not to have been planning for this situation?

  • T2 on January 19, 2012 9:12 AM:

    Romney has two problems...he's very wealthy, and he's a Mormon...Wealth is a subjective thing, Mormonism not so much. The GOP created TeaParty is not too enthralled with Big Wealth (take a look at a TP rally sometime) and they are heavily Evangelical (i.e. be like us or we hate you). They also don't like people who won't show us their tax statement. This explains the Romney Ceiling of 25% or so. He's just not getting the rabid TP support a daffy witch like Palin can get (and she's "hot" too). So we have Newt pulling even with Mitt in SC, and find that Man/Dog Santorum actually won Iowa. So we may well wind up after the first three primaries with three different winners. In this context, "winners" is also a subjective thing.

  • Dredd on January 19, 2012 9:18 AM:

    There is a phrase that describes this election cycle, and who knows how many previous ones, which is "Fake me to your leader."

  • steve on January 19, 2012 9:25 AM:

    Willard, the mormon manchurian candidate. The tax returns may reflect how integrated Mitt is in the hierarchy of the church. Do Christian conservatives really want to be governed by the church?

  • RepublicanPointOfView on January 19, 2012 9:28 AM:

    Plenty of very wealthy Americans take advantage of offshore strategies. That's not a crime.

    In all of your harping about Mitt's overseas accounts, you should realize that it is legal and if it was not, then we wealthy would buy changes to the tax laws to make it legal.

  • bob h on January 19, 2012 9:29 AM:

    Rmoney has been running for President for God knows how many years? Why didn't he shut these accounts long ago?
    There is a pig-headed tone-deafness/stupidity about Rmoney.

  • T2 on January 19, 2012 9:38 AM:

    Moureen Dowd, who I seldom read, had a column out today dealing with Mitt's Mormon thingy...the guy has a fairly deep connection to Mormon hierarchy. Seems the Church is doing a good bit of "under the radar" mechanisms to get Romney into the presidency as a means of solidifying the Mormon "way" in the US.....this explains the "I'm a Mormon" string of commercials I'm regularly seeing on broadcast TV. It's a plan, folks, to mainstream a certain Religion into the US government, and I'm not too cool with that. I doubt most of the general public would be happy about it either. And if you don't think that the Church is interested in more control, you'd better start reading up. This goes a long way in explaining why Romney continues to run for president year after losing year...it's more than just being president.

  • Kathryn on January 19, 2012 9:51 AM:

    Mitt Romney has been running for president since he lost to John McCain in 2008, at a minimum. He slipped up in one debate when he said he was alarmed the lawn care company he used had employed undocumented workers as he was running for office, for pete's sake. And yet, he continued to keep his personal fortune in oversea accounts apparently and took advantage of all tax avoidance steps available to the mega wealthy (yes, it's legal). Maybe this strategy is a winner with fellow 1 percent citizens and a plurality of conservative voters; otherwise, not so much. It's obvious Mitt is tone deaf and cannot operate as anything other than a rich stiff, but what about his high priced handlers? Surely,
    they knew the day would come that demands to see his tax returns would have to be satisfied.

  • Marko on January 19, 2012 9:58 AM:

    The Democrats should be pounding the drums that Romney needs to do the same.

    The Dems shouldn't be pounding any drums just yet. If Romney gets nominated and he hasn't disclosed his tax returns, then the Dems will definitely jump on this. The Republican voters see that train coming already and now want to make sure their candidate doesn't get run over by it.

  • OKDem on January 19, 2012 10:01 AM:

    Today's WSJ says Romney has 25% to 35% of his wealth stowed in an IRA!

    When he says he pays he pays "about 15%" he means on the 75% to 65% that is even taxed.

    http://online.wsj.com/article/SB10001424052970204468004577168972507188592.html

    Want to bet one of the first things he'll propose when privatizing Social Security is that IRA distributions are tax free or at his beloved 15%?
    "{Romney] believes that social security can be balanced through measures like encouraging people to invest in personal accounts..."

  • RT on January 19, 2012 10:05 AM:

    If Romney wants to be president so badly, why is he hurting his campaign by being a typical Wall Street sleazeball? He could have played the part of a financier with a conscience, or something like that, and still been a wealthy man. As it is, his 1%-er habits might be the thing sinks his life's ambition. He will have traded the presidency for a few bucks (by his standards). I guess he just can't help himself. Sharks gotta swim and all that.

  • golack on January 19, 2012 10:13 AM:

    CNN: "Is Romney's effective tax rate lower than yours?"
    http://money.cnn.com/2012/01/18/news/economy/Romney_effective_tax_rate/index.htm

    They had a discussion on how to calculate your effective tax rate, but ignored payroll taxes, then was able to determine avg effective tax rates for different income groups. Apparently for families in the 40 to 50K income range, the effective tax is only 3.2%. It's not just deductions and ignoring payroll taxes--they add in "other forms of compensation", the example being employer contributions to retirement accounts...hmmm...(no mention of health insurance)

    CNN was using an analysis from the Tax Policy Center.

    So which is it? Are we taxed too much already or your effective tax rate is really much less than Mitt's so the rich are really paying more than their fair share?

  • chopin on January 19, 2012 10:18 AM:

    I want to pile on a thought John Dilllinger made @ 9:06.....
    I'm not sure whether or not Obama released tax returns back to the Clinton area to show the before/after effect of Shrub's tax cuts or not. But that is a brilliant idea when it comes to Willard's tax returns. We are told ad nauseum by the Rethug "economists" and their minions that these tax cuts create a plethora of jobs. Willard's tax returns since Clinton will itemize the advantage to himself with respect to tax cuts. I want him to clarify his job creation mettle with respect to his governance in Massachusetts, his governance of Bane Capital AND his creation of tens of jobs resulting from his tax windfall. And I want to see this happen NOW damn it! What a lying sack of scat.

  • Sgt. Gym Bunny on January 19, 2012 10:41 AM:

    Again, can someone (Mittbot, preferably) explain why Mitt Romney wants to be president?

    I'm with rykirah and Kathryn above: If Mittbot has been running for the presidency for the past 4+ years now, how the hell could he have not know the Release-Your-Taxes Day would come???? He had the wonderful, awful idea to conveniently purchase all the computer hard drives from his governor's office just so his political opponents couldn't use any incriminating e-mails and some-such against him during his well plotted bid for the American presidency. What? He didn't have the foresight to purchase some new cooked-up tax returns and a few desk jockeys at the IRS, too??? I'm disappointed in the Mittbot...

    And Re: "It is critical that Romney release his tax records now, that voters might ‘take a look and decide if we’ve got a flawed candidate."

    If voters haven't figured out already that the Mittbot is "flawed", well, a plague on all their houses...

  • SKM on January 19, 2012 11:24 AM:

    T2 and Sgt Gym Bunny,
    I guess you guys haven't heard the talks from Mormons that they were going to make America the Mormon Kingdom of Zion - you should be able to find this on the net. Also, there's a film called A Mormon President - this was supposed to be from the prophet J. Smith, as well as the Oath - Blood Atonement. I do joke around a call him King Romney - because according to their prophecies, we are supposed to serve him forever. Go figure!

    Then it would be a good idea to look at the reasons for fleeing the U.S. to Mexico. The Mormons paint the picture that they fled due to polygamy. But, history shows that may not be the case. Look into Battle at Crooked River - the Mormons attacked Missouri forces. Then they tried to take over and Gov. Boggs issued an order that the Mormons could leave or be killed - look at Haun's Mills Massacre (aka Hawn's Mills Massacre). There was the 1838 Mormon War or Mormon Conflict.

    Then in May, 1857 Parley Pratt was killed - I think this is the man that stole another man's wife in Arkansas. In Sept (11) 1857, women, men and children from Arkasas was traveling by wagon from Arkansas to settle in California (the Mormons called them emigrants) they stopped in Utah for rest, the Mormons killed all 120-140 of them - the Mormons dressed up as Native Americans. They believe the orders came from Brigham Young, who was gov. of Utah.

    As far as people justifying the offshore investments - the truth is, Americans income is taxed worldwide, even if you give up your citizenship you have to pay what the U.S. thinks you owe. If you get a job, receive interest from banks, receive dividends form foreign companies, you still must report this on your income taxes.

    Oh but that's nothing. They are taking ethnic studies out of the classrooms, but, in Arizona (ASU), they have built a building for LDS - my problem with this, I think we need to take religion out of everything, especially when it is public - if it were private freestanding school, fine.

  • SKM on January 19, 2012 12:28 PM:

    here is the chamber of commerce in cayman www.caymanchamber.ky email=info@caymanchamber.ky

    they have numerous accounting firms, BDO international 1-345-949-8588
    Deloitte & Touche email=mail@deloitte.com.ky
    Ernst & Young
    KPMG
    PricewaterhouseCoopers

    read some of the websites for their news
    caycompass.com
    caymannewsservice.com
    sometimes I read their online news and see people like Mike Huckabee giving an economic speech in Cayman

    For those that don't know where Cayman Islands is, it is located in the area between Cuba and Jamaica - I think it is about 580 miles off of Miami.

    From what I have read Romney owns private planes (more than one), yachts...and I'm willing to bet he owns an expensive home in the Cayman Islands - this is a British territory - very expensive, our dollar is only worth 80 cents. Rents in this country, for a small studio apartment is well over $1700.00 a month, a one bedroom if you're lucky.

  • TCinLA on January 19, 2012 1:10 PM:

    McCain campaign's book on Willard:

    http://www.buzzfeed.com/andrewkaczynski/the-book-on-mitt-romney-here-is-john-mccains-ent

    Interesting reading. The chapters on Bain are devastating. Things like "Bain and Iran"....

  • Joe Friday on January 19, 2012 1:12 PM:

    "offshore investment structures"

    Now there's a $500/hour legal phrase.

  • TCinLA on January 19, 2012 1:26 PM:

    The one thing a lot of people who haven't lived around large Mormon communities fail to understand is that the Mormon Church is a theocracy, and Mormons very definitely follow the pronouncements of their "Prophet." The danger of a Mormon POTUS putting the Mormon Church in the driver's seat of public policy is a lot stronger than the fears of a Catholic kowtowing to the Pope back with JFK (Catholics have been successfully ignoring the Pope since the first one - Mormons never have ignored the "Prophet).

    Captcha now wants us to copy Hebrew letters? What's next, Arabic???? Cyrillic???? And of course the morons who run this site use the worst version of Captcha available.

    Those who don't believe this should ask any non-Gentile what life in Utah is like.

  • Shane on January 20, 2012 12:54 AM:

    What is there to prevent the QuiBid programmers from slipping in that winning bid, right at the end, for a dummy person that doesn't exist? They'd never have to sell the iPad. They'd never even need an iPad to sell! They'd only need to make sure they were always able to make the final bid!

  • Angry Voter on January 20, 2012 7:34 AM:

    Romney (company in the Cayman Islands with 1 employee - him) and all the major media companies (Double Dutch Sandwich - expenses claimed in US but profits hidden overseas) used obviously abusive tax shelters to avoid paying tax during time of war.

    That is clearly aiding the enemy in time of war.

    That is the Constitutional definition of Treason.

    If we had been at peace, it would simply been dishonest but we are at war and they are sleezing out of paying the taxes that support the war effort.

  •  
  •  
  •