Gamechanger? ABC News Reports on Romney's extensive holdings in Cayman Islands.

[grantcart]

Last edited Wed Jan 18, 2012, 11:04 PM - Edit history (1)

What will happen to the Republican primary campaign when Newt Gingrich gets his hands on this report just filed by ABC News?

Romney doesn't just have extraordinary wealth in which he pays low taxes but uses accounts in the Cayman Islands to further lower his tax rate. Even without the tax records there exists enough facts in the public record to raise substantial questions about Romney's financial largess and Bain Capital holding 138 'secretive' investment accounts in the Cayman Islands. How will this play in Peoria, or South Carolina?

Edited to add

Down thread thelordofhell asks if the Mormon Church will be upset that they will not get their share. It turns out that Romney used donations of stock to get a double dip benefit to further reduce his tax liability. Article below.

Romney Parks Millions in Cayman Islands

ABC Report with video (very effective)

http://abcnews.go.com/Blotter/romney-parks-millions-offshore-tax-haven/story?id=15378566#.TxdHq10WXQ6

Although it is not apparent on his financial disclosure form, Mitt Romney has millions of dollars of his personal wealth in investment funds set up in the Cayman Islands, a notorious Caribbean tax haven.

. . .

As the race for the Republican nomination heats up, Mitt Romney is finding it increasingly difficult to maintain a shroud of secrecy around the details about his vast personal wealth, including, as ABC News has discovered, his investment in funds located offshore and his ability to pay a lower tax rate.

. . .


But tax experts tell ABC News there are other reasons Romney may not want the public viewing his returns. As one of the wealthiest candidates to run for president in recent times, Romney has used a variety of techniques to help minimize the taxes on his estimated $250 million fortune. In addition to paying the lower tax rate on his investment income, Romney has as much as $8 million invested in at least 12 funds listed on a Cayman Islands registry. Another investment, which Romney reports as being worth between $5 million and $25 million, shows up on securities records as having been domiciled in the Caymans. Official documents reviewed by ABC News show that Bain Capital, the private equity partnership Romney once ran, has set up some 138 secretive offshore funds in the Caymans.

. . .


Tax experts agree that Romney remains subject to American taxes. But they say the offshore accounts have provided him -- and Bain -- with other potential financial benefits, such as higher management fees and greater foreign interest, all at the expense of the U.S. Treasury. Rebecca J. Wilkins, a tax policy expert with Citizens for Tax Justice, said the federal government loses an estimated $100 billion a year because of tax havens. Blum, the D.C. tax lawyer, said working through an offshore investment vehicle allows the investor to "avoid a whole series of small traps in the tax code that ordinary people would face if they paid tax on an onshore basis."

Wilkins agreed, saying the "primary advantage to setting those funds up in an offshore jurisdiction like the Cayman Islands or Bermuda is it helps the investors avoid tax."

Romney's campaign has responded with "everything Romney has done is legal" which sounds like a non-denial response to the facts. The experts cited explain that even though the rates on income will be the same as the US, Romney may be using other aspects of the Cayman Islands to further reduce tax liabilities, even though it may be legal.


Edited to add that Romney also used stock donations to the Mormon Church to further reduce tax liability

In Bain deals, Romney gave stock to Mormon church


http://www.reuters.com/article/2012/01/19/us-usa-campaign-romney-donations-idUSTRE80H28B20120119?feedType=RSS&feedName=topNews&rpc=71


(Reuters) - Using a practice that made him eligible for large tax deductions, Mitt Romney gave the Mormon church substantial stock holdings that he obtained through his private equity firm, according to documents filed with the government and to Romney associates.

The tactic used by Romney to help meet his Mormon obligation of "tithing" - in which members donate 10 percent of their income to the church - is a common way for wealthy Americans to make large donations to charities, tax specialists say.

But against the backdrop of a Republican presidential campaign in which Romney is being pressured to reveal his tax returns and further details on his vast wealth, the donations shed light on the tax strategies of Romney and others at Bain Capital, the private equity firm he co-founded in 1984.

The analysts said that if Romney and others at Bain got a stock cheap and eventually donated it to a church or charity without cashing in the stock, then they could get two tax benefits. First, they would not have to pay capital gains tax on the appreciated value of the stock, which they would have to do if they sold the stock and either pocketed or donated the proceeds. Second, they might be able to deduct all, or at least part of, the value of the donated stock from their taxable income.

[bluestateguy]

1. Doubt it

Bump in the road? Maybe. But the coronation has already been planned and scheduled. The caterers have already been hired and the floral arrangements have already been made.

[Proud Liberal Dem]

30. Not going to matter in the GOP primary

They all defend this sort of stuff all the time. This could just add on to his problems in the GE. If the election is between Mr. 1% and Mr. 99% in this economy, Obama should be the favored candidate IMHO.

[Ikonoklast]

36. The East Coast Big Money was always behind Romney. But they still need the Cultural Republicans

in Peoria to vote for their guy.

If small-town Republicans start getting second thoughts about voting for a guy that just might buy out their business and kick all the employees to the curb, robbing them of their livelihoods, benefits, and pensions in the process, God, Guns, and Gays won't be enough reasons to vote for Romney.

Because now, it's getting personal. They can see Romney as a tax-evader, and a guy that never once got dirt under his fingernails to make a buck.

Romney will lose the moderate voters, and many on the Cultural Right over this.


Old Money Republicans screwed the pooch with picking RMoney as their boy.

[TheOther95Percent]

2. Everything Romney has done is legal

for multimillionaires. Middle income people don't have the opportunity to invest in tax havens that provide "...higher management fees and greater foreign interest." I wonder who he's mixing his money with in these Cayman funds too since public disclosure of the fund investors is nil. Maybe he's investing with the Bin Laden or Quaddafi or Mubarek families since good rates of return and complete anonymity is what dictators/rich folks with black sheep family members look for in an investment vehicle.

[Remember Me]

13. People who avoid payng taxes in the U.S., no matter how "legal," that is, shouldn't

be President. Period. I happen to think "patriotism" means pay to play. You pay your dues, which are taxes. You got great wealth? You oughta have a great tax bill, not great ways to avoid U.S. taxes.

I think most of the electorate will agree.

[Flatulo]

18. Exactly. People need to see what a elitist scumbag this guy is. He is the .01%. nt

[roguevalley]

15. its about morality and perception ;)

[elehhhhna]

25. Actually,the ONLY reason to park personal wealth in Cayman is to

under-report or not report the income, gains,dividends, etc. -- even the income itsself if ill-gotten...Cayman's a great place for "friends" to open an account for you and slip you some dough under-the -radar. I've spent a good amount of time in Cayman and met a few bankers and financial workers. They don't (can't) blab tooo much but I've been told that the accountholders lists would cause Americans faith in EVERYONE TO CRUMBLE: POLITICIANS, RELIGIOUS FIGURES, BUSINESSPEOPLE, ATHLETES, ENTERTAINERS, eveRYBODY you ever heard of, pretty much.

[Liberal_Stalwart71]

33. And actually, these Republicans have been lecturing us about how the rich may more

taxes than anyone else.

Here's irrefutable truth that they are full of shit!

[Charlemagne]

41. The right will argue

That this isnt a big deal. The big deal is the US tax system that FORCES the job creators to take their money elsewhere. As such, taxes should be reduced in order to influence the money to come back.

Of course we know that the money wont come back, but people will hear that and think they too could be very wealthy if only rich people paid less in taxes.

[Major Hogwash]

3. It may be legal, but it isn't ethical. I think Mr 1% has a problem.

Too bad, so sad.

[salin]

8. completely agree...

"I want to run the country, but I also don't believe that personally I should pay taxes on some of my money that is due t the govt because of my personal greed..." Is a meme that doesn't engender trust that one is interested in actually serving the greater good for the country. In this economy... this is potentially bad for Romney. He could become the symbol for the really rich who don't believe that they have to pay fairly into the system that makes our system (that has benefited him enough to make tons of money to shelter in the Caymans) work.

Had this been in the late nineties during the tech boom, when many small investors believed that they could make out big on picking the fund that rightly selected the next big thing... then this narrative might be grandly popular. However, in this recession, this narrative could become toxic.

[Pirate Smile]

14. "Romney should change his "Believe in America" slogan to "Believe in the Cayman Islands"

Loved this tweet I saw when the news broke:

“@ritaag: Romney should change his "Believe in America" slogan to "Believe in the Cayman Islands" #Romneynewslogan”

[grantcart]

21. brilliant

[thelordofhell]

4. Shouldn't his church be pissed at this?

Mormons are required to tithe 10% of there income to the church. If mittens is squirreling all this wealth away, how can his church take it's tithe. I think mittens is more scared of the Mormon Church than the IRS

[grantcart]

6. No he cut them into the whole thing and further reduced his taxes

http://www.reuters.com/article/2012/01/19/us-usa-campaign-romney-donations-idUSTRE80H28B20120119?feedType=RSS&feedName=topNews&rpc=71

(Reuters) - Using a practice that made him eligible for large tax deductions, Mitt Romney gave the Mormon church substantial stock holdings that he obtained through his private equity firm, according to documents filed with the government and to Romney associates.

The tactic used by Romney to help meet his Mormon obligation of "tithing" - in which members donate 10 percent of their income to the church - is a common way for wealthy Americans to make large donations to charities, tax specialists say.

But against the backdrop of a Republican presidential campaign in which Romney is being pressured to reveal his tax returns and further details on his vast wealth, the donations shed light on the tax strategies of Romney and others at Bain Capital, the private equity firm he co-founded in 1984.

[FailureToCommunicate]

5. Legal and wrong. The 1% (the .001%) get everything.

thanks for posting.

[BlancheSplanchnik]

7. Kick and REc for visibility

I'd like this to make it to mass awareness.

People hate the trick of hiding money offshore.

[grantcart]

9. Lawrence O'Donnell just led with this story.

[BlancheSplanchnik]

20. Thanks for the heads up!

That's good to know Excellent!!

I don't watch tv, and no news....drives me too crazy...I wouldn't have known wihthout you.

[Ruby the Liberal]

10. One can only hope, grantcart.

We have 10 more months to go and I was sick of his phony, economically pirating, materialistic ass before I ever heard of him. He embodies everything about segments of humanity that I detest and if I never see his picture or hear his voice again, I will die happy.

[Jackpine Radical]

11. Doesn't all this just show that he's a successful rat?

Isn't that what the Republicans want?

I meran, fer Chrissake, lookit everything we knew about Bush, Arbusto, the Rangers real estate, etc.

None of that bothered Bush, & it won't hurt Romney.

[siligut]

29. Well, when you put it that way . . .

I am starting to feel like an eloi.

[Angry Dragon]

12. This guy seems to have all kinds of skeletons in his closet

I wonder how much is left in there??

[The Wizard]

16. Mitt is the tip of the iceberg

How many of our political leaders have stealth accounts in off shore tax havens? It's the place where mystery campaign contributions go. Any campaign finance reform is a smoke screen. As long as money laundries are willing, politicians will play.
Now if there were some draconian penalties for this, things might change. Can we go back to the Code of Hammurabi?

[elehhhhna]

26. Answer: ALLOF THEM (except maybe Palinm - too dumb)...

see my post upthread.

[Fearless]

17. Hell I wish I had the money for 138 accounts

forget secret! I'll make it all public if I did!

[Proud Liberal Dem]

19. The fact that what he and Bain are doing is "legal"

should be the real outrage/scandal IMHO.

[DFW]

22. There will only be outrage if.....

Most people know that the Cayman Islands are not in the United States. Knowing the education level in
Parts of rural South Carolina, many might not even realize this.

Also, if he declared everything and paid all taxes legally due, it will be relatively easy for his spin doctors
to swat this away in the eyes of Republican voters. The same people who thought having the government
in their bedrooms was OK, or think it's fine insisting on unobtainable photo ID to vote with "what are you
afraid of?" won't have a problem with this. Having a minimum of understanding of the situation here is
necessary for a minimum of outrage, and that is asking a lot of the American electorate--unfortunately.

[elehhhhna]

27. Regardless,the only reason to open a Caymanian account it TAX AVOIDANCE.

period.

[DFW]

38. Obviously

(Unless you own an interest in the Cayman tourist industry).

But you are assuming that most Americans know that the Caymans are not some chain off the North Carolina Coast.
You have to know that the Caymans are outside the USA before you know that this is a big deal. I'm betting most don't.

[MMJjestic]

45. Mitt the Tax Cheat, Should be the Democratic talking point

Follow him everywhere with word TAX CHEAT TAX CHEAT!!!

[cliffordu]

23. K&R......

[SemperEadem]

24. talk about gaming the system

but you know what? He photographs well and that's all the thug voters care about.

[leftyohiolib]

28. mitt romney responds

the cayman islands are people, my friend. who let the news out, woof woof.

[olegramps]

31. The crooked Congress has made what what woud be considered illegal, legal.

The nation has been sold out by professional politicians who have made themselves wealth at the expense of the working class. The working class bought the corporate propaganda that unions were evil and that they would be taken care of by their benevolent employers. When union membership went from a high of 36% to 6% they had no protection from the jobs being outsourced, their pensions cut and health insurance canceled. Powerful unions could gain the attention of their representatives and demand that they protect workers. Now they have no one to represent their interest and have inherited the wind.

[Scurrilous]

32. K & R

[grantcart]

34. Thanks

[Canuckistanian]

35. Mailboxes in the Cayman Islands are people, too

If mailboxes in the Caymans are corporations, and corporations are people, my friend.......

[Cali_Democrat]

37. Romney also needs to disclose his tax returns going back 10 years

What's he hiding? I don't want to just see one year...I want to see 10 years.

[LongTomH]

39. Holy Tax Dodge, Batman

[Festivito]

40. Gee, another president who can make money by dropping our economy DOWN.

haven't we had enough of that yet?

[just1voice]

42. We all know repukes are criminals and it's good to see the evidence

Thanks for posting.

[LiberalLovinLug]

43. "when Newt Gingrich gets his hands on this report"?

Depends on how much of HIS fortune is tied up in the Caymans.

[DCBob]

44. So it comes down to this.. Cayman bank account versus open marriage.

Wonder who wins that one.

[FailureToCommunicate]

46. It's interesting that both stories are from ABC news... Superpact sculduggery?

[Hubert Flottz]

47. Mitt has better things to do with his tax money...

The bush tax cuts were not enough for Mitt.