Romney offshore accounts contain up to $32 million

[kpete]

WASHINGTON (AP) – Republican presidential candidate Mitt Romney owns investments worth between $7 million and $32 million in offshore-based holdings, which are often used legitimately by private equity firms to attract foreign investors. Such offshore accounts also can enable wealthy investors to defer paying U.S. taxes on some assets, according to tax experts.

An Associated Press examination of Romney's financial records identified at least six funds set up in the Cayman Islands, a small Caribbean island chain that has long been used as a base for international investments because of low tax rates and financial secrecy. Romney has acknowledged that some of his investments are based in the Caymans, but he has not identified all of the specific accounts and the amounts based there. There is no indication Romney uses the accounts to dodge any U.S. tax obligations.

..................


Five of the Cayman-based funds are included within a blind trust for Romney's wife, Ann, and worth between $2.8 million and $7.6 million.

A sixth fund, called Bain Capital Investment Partners Trust Associates lll, is part of Romney's IRA retirement account and worth between $5 million and $25 million.

more:
http://www.usatoday.com/news/politics/story/2012-01-20/romney-offshore-accounts/52700400/1

[Kingofalldems]

1. Here comes Jeb

[DeathToTheOil]

7. No. Too soon.

[patrice]

11. Why can't we raise the same issues about the Bush dynasty?

[MADem]

54. He's got more baggage than the American Tourister Chimp.

[avaistheone1]

60. LOL

[tanyev]

2. "P'shaw. $32 Million? That's nothing, my friend."

[JoePhilly]

3. PO Boxes = Corporations = People ... my friends.

[sarcasmo]

4. That's not much.

How else can he pay for those four houses.

[BeyondGeography]

5. Dude is toast...nominate him

[tosh]

6. I am really baffled by this:

A sixth fund, called Bain Capital Investment Partners Trust Associates lll, is part of Romney's IRA retirement account and worth between $5 million and $25 million.

From the IRS website: http://www.irs.gov/retirement/participant/article/0,,id=188232,00.html

"If you are 50 years of age or older before the end of 2012: The maximum contribution that can be made to a traditional or Roth IRA is the smaller of $6,000 or the amount of your taxable compensation for 2012. This limit can be split between a traditional and a Roth IRA but the combined limit is $6,000. The maximum contribution to a Roth IRA and the maximum deductible contribution to a traditional IRA may be reduced depending upon your modified AGI."


How the HECK does anyone's IRA account grow to be between $5 million and $25 million??!?

Am I just missing something obvious here?

[Thrill]

8. You aren't baffled

He;s a rich crook. Thats how.

[daleanime]

13. Interest rates...

that will never be offered to the 99.

[underpants]

27. The 99 can't have money to put into it. -- okay you contribute $1,000 a year

that is roughly $40 a pay period. Let's say you get 5% - that is $50 a year you add. It does add up.

next year - $1,050 to throw into the pot, keep adding up. It does add up.

Let's say you have $1,000,000 to throw in. Take the numbers above and add 3 0's.

at 5% you get $5,000. It does add up.

[itsrobert]

18. He's Mormon, $6000 for every wife

He must have at least 400 wives.

[Rosa Luxemburg]

25. maybe he hides his 400 wives in the Cayman Islands too?

[maryallen]

48. Good one.

[antigop]

19. The WSJ had an article on "Romney's unorthodox IRA"

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

Like many Americans, Mitt Romney has an individual retirement account. Unlike most Americans, Mr. Romney has between $20.7 million and $101.6 million in it, a big chunk of his fortune.

Experts on estate planning said it is highly unusual to accumulate such a considerable sum in an IRA, an investment vehicle restricted by annual contribution limits. It appears that Mr. Romney's grew so large mostly because it holds investments in Bain Capital, the private-equity firm he helped start.

Under federal law, Mr. Romney isn't required to pay annual taxes on the account's investment gains, and the bulk of his contributions to the fund are likely to have been pretax dollars, IRA experts say. As such, the Romney IRA has enabled the current Republican front-runner to defer paying taxes on a sizable portion of his wealth—although he could face high tax bills when he eventually withdraws the money.

A Romney campaign aide said the tax treatment for his IRA "is the same for Gov. Romney as it is for every citizen of the U.S."

Several estate-planning experts said they know of others with IRAs of more than $100 million, but they are rare. Typically, they said, that occurs when founders of companies invest in their own shares, which then take off.

[golfguru]

35. If I was as smart as Mitt

I would have much more. He is not all that successful as he claims.

[DallasNE]

38. TThe WSJ Link Was Very Insightful

I It leaves some gaping holes that Romney needs to explain. The only advantage someone like Romney has is to take advantage of the company match and to hope for lower rates down the road. There is one misstatement in the WSJ article.
"income from the account, when eventually withdrawn, will be taxed at the higher ordinary-income rate, not the lower capital-gains rate that might have applied if Mr. Romney had held the investments outside the fund."

TThe lower capital-gains rate only came into being during the Bush term so when Romney earned the money it would have been taxed at the ordinary-income rate. Also, for some of those years the top rate was 38% so Romney is a winner on two counts by putting the money in an IRA. The amount is still baffling, however.

[Sgent]

39. Not quite true

The current lower rate came into being during the bush presidency; however, the capital gains rate has been significantly lower (at least half) than the ordinary income rate since at least 1986 -- and probably before.

[DallasNE]

41. It Looks Like We Need To Split The Difference

According to this chart from Paul Krugman.

http://krugman.blogs.nytimes.com/2012/01/18/the-history-of-capital-gains-taxes/

[Sgent]

49. Those look about correct

but keep in mind that the marginal tax rate on regular income was still about 1.5-2x the capital gains rate through most of that period.

For instance the top marginal rate in the 70's was 70%.

[DallasNE]

52. This Is From Memory

But as I recall from the 1980's capital gains were split between short term and long term and they couldn't be mixed. Anything held less than 6 months (short term) was taxed as ordinary income. On anything held more than 6 months (long term) you took 50% off of the gain then the other 50% was taxed as ordinary income.

In today's world many senior executives receive a substantial part of their income in the form of stock options, usually with an expiration date. It is not uncommon for the option price to be 25% of current market value. The senior executive then exercises his option then turns around and sells the stock the same day. Under old rules the difference was a short term gain taxed as ordinary income. Today it is taxed at a flat 15%. Under the Buffett Rule that would change.

Another thing the savvy executive does is to exercise his option and donate that stock to charity. Here he pays 25% for the stock and deducts 100% for the gift from other income. The only thing better than that is to park it in the Cayman Islands.

[efhmc]

20. You can open a stock fund within your IRA. I have one and made some

good investments so my worth is more than the base amount I put into the fund.Still I can't imagine what he invested in that made his fund worth so much.

[wordpix]

29. you're talking about a Roth IRA, which has this limitation- a regular IRA doesn't

I know about the Roth b/c that is for people like me, i.e. not wealthy. Maybe someone with a regular IRA can weigh in.

[Sgent]

40. Roth's and IRA's

have the same contribution restrictions.

However, regular IRA's often have higher balances because they are a rollover from a 401k plan which does have much higher contribution's allowed.

[xtraxritical]

44. Insider trading, tosh.

[tosh]

46. I see that now...

I just saw this covered on Chris Hayes. It seems he invested in shares that were grossly undervalued.

[Octafish]

9. Betcha $10,000 there's more.

A lot more. In Switzerland.

[jmowreader]

24. He's better off in the Caribbean

The Swiss, having been stung by revelations that their banks have been used as a conduit for illegally-acquired funds, have tightened up recently.

Besides, if Willie wants to visit his personal banker, it's cheaper to fly to the Caymans than to Geneva.

[xtraxritical]

45. Exactly...

I've long suspected that almost every pol has Cayman, Swiss, or some other country's secret bank accounts to facilitate their pay offs.

[wordpix]

55. reports say he has offshore acct(s) in Bermuda, too

we haven't heard about THAT one

[patrice]

10. Why aren't the tax benefits he enjoys DISCRIMINATORY against incomes like mine?

http://www.epi.org/blog/mitt-romney-loves-tax-subsidies/

"It should be noted, however, that Romney does benefit from the carried interest loophole, a defect in the tax code that allows private equity and hedge fund partners to reclassify their compensation as capital gains and thereby enjoy the 15 percent rate on all of their income, not just their capital income. But this loophole only exists because capital income enjoys a preferential tax rate in the first place."

[wordpix]

31. that's a good point, maybe DU should bring a class action suit based on Equal Protection clause

I'm no lawyer but I do know a bit about the Constitution

[JJW]

12. Just the kind of leader we need

Perhaps we can move the SS funds offshore too.

[gratuitous]

14. Question for the next debate

So, Mr. Romney, you have substantial financial holdings in offshore accounts in the Cayman Islands. Tax experts say this is a standard procedure for deferring U.S. taxes. Are you planning on renouncing your citizenship to avoid paying taxes on these holdings altogether?

[riverwalker]

15. holy buckets n/t

[valerief]

16. He's creating jobs for Caymanians. nt

[itsrobert]

17. Why such a large spread?

Quite a difference between $7 million and $32 million.

[PuffedMica]

21. Just a little walkin' around money

For those weekend get-aways where mittens need some 'off the books' cash for gambling in offshore casinos.

[woo me with science]

57. You never know when you'll need to make a bet. nt

[tabatha]

22. Ed Schultz and Mike Papantonio just discussed this.

Romney is a dangerous man and has to be taken down.

However, Romney is supported by many Republicans and will fight Gingrich tooth and nail.

At the end of the primaries, there will be two very bloodied people.

And the Republicans may reject Santorum as well.

[gateley]

23. I was just coming here to post what Papantonio said today when he filled in for

Ed on the radio. I thought it was a PERFECT question to ask Romney.

If he's paying the capital gains tax rate just as he would if the funds were here in the U.S., WHY put it in the Cayman Islands?

Also, he said he's worked on cases where each and every time funds were in the Cayman Islands, people were scamming and hiding. Otherwise, again, they'd just put the funds in American banks.

I hope they go after this with a vengeance.

[tabatha]

28. You summarized it better than I did.

[gateley]

30. You saw them on TV, I just heard Pap on the radio -- so

we heard different things.

He was also saying how Romney got some company (forget the name), borrowed against it, INCLUDING $40 mil of pension funds, declared bankruptcy, and the taxpayers had to pay for the pension funds. Romney paid off the investors ($20 mil was what they walked away with), and Romney pocketed $12 million. Most likely sitting in the Cayman Islands.

AND he said how he'd get GOVERNMENT bailouts, bankrupt the company, and do the same thing.

I wish we could sum this up and get the point across to the masses. Colbert needs to do a bit on this. It's just truly pillaging America and shipping the bootie offshore while we collapse at home. It's despicable.

[wordpix]

33. this is one rat fight I'm enjoying

[JDPriestly]

26. OK -- foreign investors.

For whom is he working? Who funded his hedgefunds? Where does his money really come from? Where did he get it when he first started? As he progressed?

Who will he represent if he becomes president? Some foreign interest or Americans?

And, assuming he opened accounts in the Caymans in order to attract foreign investment, why did he leave it there? How can he claim to be a patriot if he leaves his money in offshore accounts?

What country does he care more about? The Cayman Islands or the US?

There may be reasons to have foreign bank accounts in countries in which you don't live, but do we want a commander in chief who is more interested in protecting his millions in the Caymans than in protecting the life savings of Americans in the US?

[wordpix]

32. and while we're asking questions, how does he make his investors 88 pct. per year?

That is a hell of a lot of return on investment. No doubt it helped that the Caymans is a tax haven.

I would like to know how Mr. Offshore Tax Haven did it.

[golfguru]

34. Just $32 million? That is small potatoes

I thought Romney said he was successful?
Most hedge fund owners/managers are worth much more.

[gateley]

36. That's all they've uncovered -- all that he claims. Who knows how much is hidden?

[wordpix]

56. I read $100 M somewhere

$32M or $100M - they guy is hiding his tax free haven money offshore

[golfguru]

58. Yap, why put any money in Cayman Islands?

It is a known haven for tax evaders. By the way I have stopped there on a cruise once, and it looked way more prosperous than other Caribbean ports.

[DallasNE]

37. Something Doesn't Smell Right Here

There are limits on the amount you can put in an IRA account. My recollection is that it is somewhere around $20,000 a year. Also, there are limits on what funds one can invest in. So how can Romney invest in accounts that you and I cannot invest in and with sums that are 10 times greater than allowed by law for you and I. I would focus on this IRA account of Romney's because it stinks to the high heavens. It is probably legal but priviledged.

[annabanana]

42. "used legitimately by private equity firms to attract foreign investors"

And it attracts foreign investors because. . . . . .

OF THE TAX SHIELDING ADVANTAGES.
So it's about avoiding taxes either way.

[bigtree]

43. omfg

I had no idea it was that much. So he's prepared to tell Americans to pay their taxes and invest in America?

[Javaman]

47. the good ship mittens just hit some rocks off the grand caymans.

and the best part about this, it's putting an even bigger spot light on a practice that has long been a sore point among those of us 99%'ers.

his rich buddies are probably less than happy with mittens now.

[SoapBox]

50. $32 MILLION?? Hell, I've barely got $32.00 in savings...

These fuckers continue to REALLY piss me off.

And when the HELL will the STOOPID borned-again, evangelical, so-called Christians stand up against this stuff????

...hypocrites.

[Hepburn]

51. Holy shit...

...he is the 1% of the 1%!

[glowing]

53. Mr 1% for real!!!

And the Pigs were thinking he was the best shot against the President? LOL... And the latest shining Piggy is Newt Freaking Gingrich... He is literally running around asking for forgiveness and for people to have empathy with him for his mortal, human failings in dealing with his ex wives and ethics problems....

This is the party that tore into Anthony Weiner for sensing his junk pics to women other than his wife (and not having actually slept with these women).. LOL!

[DU2012]

59. Wow

More than One would imagine.