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"You want to pay me a million dollars to sleep with my wife? Are you nuts? I want at least TEN million dollars, and YOU have to cover her Tiffany's bill for the year!"
Republican Mitt Romney informed the United States today that, if he swears an oath of fidelity to it a year from now, he will still want it to be an “open relationship” when it comes to basic needs like the primal urge to seek tax shelters.
“I’m a businessman, I have needs,” Romney explained. “No one country’s banking system can be expected to satisfy me completely. That’s old-fashioned thinking.”
Romney, it has been revealed, has had a long-time financial relationship with the Cayman Islands. He has claimed that he has no control over where he puts his money. “Sometimes I just can’t help myself,” he admitted. He said that his extra-national affairs amount to “not very much,” only an amount equivalent to roughly ten times that of the average American every year.
Friends have presumed that he would discreetly end this relationship as he moved towards seeking a formal commitment to the U.S. Presidency. “People start to notice after a while,” commented one friend. “You can see it in how his eyes get wide when he talks about foreign interest.” He surprised them today, however, by pledging that he would continue to mess around with the Caymans and other foreign tax shelters any time that he wanted.
“It’s my prerogative as an adult man, for Pete’s sake!” he explained. “I’m paying only a 15% effective tax rate! Dear Lord, that’s so good! Mammon! Oh, Mammon!”
[Note for the dim: yes, this is satirical, thanks!]
Bill Clinton should have been so lucky.
Are you referring to “like Romney in the satire” or “like Gingrich in real life”?
I know I was confused too. Probably just another person like Cook who reads a title and responds without reading or trying to understand the article.
Now that I’ve heard the whole story, I realize – Republicans this year have to choose between a Mormon and a polygamist.
He needs to release his tax returns dating back to 2000 (just like Obama), so we can see if he was dodging or delaying his full tax responsibilities while this country was waging two wars.
Every soldier and veteran should DEMAND to know, after all what kind of “commander-in-chief” wouldn’t support his country during wartime.
like tax cheat timmy , and charles rangle too
Hey Newbie, are you going to come on here and berate The Grating Juan for using a non-sequitur?
Why should he or anyone else release their tax records?
What next? asking the male to drop their pants and the females to take off their top so the cattle see who measures up?
“Why should he or anyone else release their tax records?”
To see if they put their money where their mouth is, paying taxes IS patriotic and also quite revealing.
What if the President were a tax cheat?
The President is setting/proposing policy about how your tax dollars are spent, who pays and how much, don’t you think it’s important that they lead by example?
And in the case of Mitt, possibly offshoring money in the Caymans to “delay” paying taxes, it might be perfectly legal, but as President he would be Commander-in-Chief. He will be asking soldiers to “delay” seeing their wives and husbands, “delay” seeing their children born and grow-up, “delay” seeing aging parents and grandparents and possibly permanently “delay” growing old themselves, all while these soldiers pay their full share of taxes.
I think it’s very pertinent if Mr. Romney who didn’t serve and who’s FIVE strapping sons didn’t serve, also didn’t feel he needed to fully support his country during wartime by paying his full share of taxes.
I think offshoring money, whether legal or not, speaks to one’s COMMITMENT to their country.
Also, what if Mitt payed MORE to the Mormon Church than he did to the US government, what would that say about his loyalties?
Tax returns tell a very important story, the fact that Mitt wants to keep his secret is very interesting, to say the least.
Yeah, the travesty of someone planning for taxes and delaying paying taxes like: contributing to a 401K (delaying tax until retirement), contributing to a Roth IRA (escaping tax all together- not even delaying), contributing to 529 education plans (escaping tax tax all together), contributing to a traditional IRA (delay pay tax until retirement), contributing to defined benefit plans, contributing to a SEP IRA, having an employer pay you vacation time off (delays paying tax until received not earned), having an employer pay you sick time…
Do we really want a commander in chief who delays paying tax even though it is legal? Open for discussion, but just b/c he uses legal tax deferral strategies does not mean he is not patirotic or committed to the country…other items maybe, but not legally deferring tax.
For anyone who has mutual funds, wait until you get your 1099 here in a month or so…if you have foreign tax withholding (pretty much all international ones will- a lot of others too), a portion of what you are invested in is over seas and you are paying foreign tax and reducing your US taxes (i.e. foreign tax credit). Maybe we should use that as a test too- if you are investing overseas, that is unpatriotic. His wealth is just exponentially higher than most of ours, so his investment base is simply higher.
A President or a Presidential candidate should be held to a higher standard than your average tax payer, exploiting the tax codes to the point of setting up accounts offshore, especially during wartime might be found offensive and even disqualifying by some voters.
Romney has been running for President for many years and is aware how appearances matter, his own words to his gardener when he was worried that he might be employing an illegal alien; “I’m running for President for Pete’s sake”, prove as much.
Let’s see if he has been as circumspect with regard to his finances, if he has nothing to hide, releasing his tax returns shouldn’t be a problem.
I agree that we should hold politicians to a higher standard. Unfortunately, most politicians fail in living up to the higher standard- or even up to a regular standard. I don’t know where the standard is set on this one though in terms of taxes. I feel that a lot of the public is not fully paying the correct amount of tax- a fudge here or a fudge there. So, if he actually pays the correct amount of tax and discloses the correct information, it would seem that he is actually being above the average Joe.
He now has released them. I can’t seem to find an actual copy of the return, but assume it is coming on the internet like it was previously reported.
It is not exploiting the tax code to utilize what is available. It is not exploiting the code to pay the right amount of tax and disclose what is needed to be disclosed to the IRS and Treasury Dept. Paying the right amount of tax per the current enacted code is patriotic and if everyone actually did that, we would be in a lot better fiscal position than we are. If the rules on carried interest need to be changed, that is a different position.
Well, we’re generally thinking that Mitt probably didn’t break any laws. It’s just that many Americans believe it’s unfair that taxes on investments that most rich people make their money on is unfairly low .. and this makes Mitt a poster boy for that unfairness as well as many others.
Vern- There are a lot of poster boys for that position…that is where congress comes in and changes the law. I think that there is a good momentum on changing some of the tax laws- some for the better and some for the worse IMO.
I just don’t think that we should vilify someone for following the laws. In fact, this taxpayer is likely overly conservative in his tax filings- notice that he does not have $475 of items donated to Goodwill on his Sch A or cell phone/internet/publications/mileage expenses on Sch C. Again, if everyone in the US were to actually pay the proper amount of tax, then the fiscal crisis would not be as great.
Remember, my comments were more directed at Anonster indicating either directly or indirectly that he was not patriotic for not paying his fair share of taxes by delaying taxable income during wartime by offshoring his money. I just don’t think one can make that leap on someone who quite possibly is paying all that they owe and may even be more conservative in his tax situation than others…by conservative I am not meaning Repub/Dem but instead conservative vs aggressive in tax positions.
If nothing else, his taxes shows how utterly complex our tax system is…found his return by the way. As I suspected, virtually all of his ordinary income (interest/non-qualified dividends/self-employment income) was offset by very large charitable contributions.
TJLocalSA,
Our tax rates are very political, just who do you think lowered the capital gains tax rate down to 15%? Yeah, that’s right, Bush and he did it during wartime, the FIRST TIME IN HISTORY THAT OUR COUNTRY CUT TAXES DURING WARTIME.
All these patriotic hawks who don’t want to sacrifice ANYTHING, not their kids and not their money, but they have no problem asking our troops to sacrifice EVERYTHING, they make me sick.
Anonster- You are not going to get an argument from me over when LT Cap Gain rates were decreased down to the current 15%; that is just fact. Nor are you going to get me to disagree that tax rates are political- politicians set the rates and other tax policy so it therefore is political.
However, that was not the point of your post as I understood it. You indicated that he should be held to a higher standard than the public and that somehow by him legally delaying paying taxes was unpatriotic and was below the higher standard- even though a lot of the public delays (or does not pay tax at all) by using deferral techniques such as 401K, IRA’s, Education Accounts, Health Savings Accounts, Vacation Time, Sick Time, Defined Benefit accounts, SEP IRA, Profit Sharing, etc…
I guess if nothing happens in 2013, we will see that cap gains rate go up and also have the additional investment income surcharges. I am definitely open to relooking at the investment tax rates and especially on carried interest.
My folks did not force me to go to the military and they fortunately were able to utilize the deferral techniques that were available to them- they are patriotic IMO yet also do not make a boat load of income either.
I just wish that our political system would not be so over the top with its analogies and absolutes (not a specific jab at Anonster, but in general). If we could just get to “truth” I think things would start to move and a compromise of the issue would ensue without compromising each sides’ ethics.
TJLocalSA,
I think there is a HUGE difference between taking full advantage of the tax codes and having offshore accounts, especially during wartime and especially for a Presidential candidate and Governor.
This is a personal bugaboo for me, offshore accounts in MY OPINION, are the epitome of gaming the system. For me, if you can’t pay your taxes in this country, especially during wartime and even more especially if you support the war, you should get the hell out.
I don’t see how anyone in the military could support someone who was/is going the extra mile, scouring the globe looking for the lowest tax rates while their country is at war.
How would Romney be able to come before the troops as Commander-in-Chief and ask them to sacrifice EVERYTHING for the US, when he himself has not been willing to sacrifice ANYTHING, not his sons and not his money. It is inconceivable to me.
I still think Mitt has to release more years and also answer some more questions, good article from TPM;
http://tpmdc.talkingpointsmemo.com/2012/01/three-key-questions-raised-by-romneys-tax-revelations.php?ref=fpa
Anonster- Fair enough response on your personal bugaboo towards foreign investments. Although, in this growing world wide economy, there are many opportunities to make investments all over the world. The US tax system is set up so that when that money comes back to the US, it is subject to US taxes. Before that time, the income is subject to the taxing system in the country it is earned. This is an item that Congress is currently struggling with and the answer lays somewhere in the middle I am sure.
A lot of people are not so US-centric that they would discriminate against world wide investments. Many companies purchase products from overseas. I know that I do personally and assume that you do also. Many of the products that we enjoy are cheaper based on the world wide market. I am all for buying US made products and despise having some companies exploit foreign workers, especially children.
If you have any investments, I would challenge you to check your 1099 coming out next month to see if there is any foreign tax withholding. If there is, you are participating in a similar, yet not exact, tax structure. Also check your year end 401K statements and, if you have investments through a public pension or other deferred comp plan, you should investigate where that money is investigated. A lot of us have the same foreign investments and don’t even know it. Why? Because foreign investments are a wise part of most portfolios both for return on investment opportunities and also for diversification. Investment advisors for deferred comp plan, including public unions, know this and as such make such investment decisions. Again, I would surmise that he is not really doing much different than a lot of us- he is just doing it in a more direct manner due to the size of investable assets.
By the way, foreign investments are codified and if there was such a HUGE difference in deferral, Congress would have made such differences codified. I understand that it is just your opinion and I can respect that. Sounds like mine is different, yet I am glad we can have a civilized discussion about it.
TJLocalSA,
What you and I do is irrelevant, we are not going to be standing in front of a group of young men and women and asking them to lay down their lives for this country, ANYONE who may be in that position HAS to be held to a higher standard.
Furthermore, buying products made overseas and investing in foreign companies is far different than opening bank accounts offshore. Why would anyone open an offshore account if not for tax benefits?
“It helps U.S. investors avoid U.S. tax,” Rebecca J. Wilkins, a tax policy expert with Citizens for Tax Justice.
From ABC News;
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.*
Romney campaign officials and those at Bain Capital tell ABC News that the purpose of setting up those accounts in the Cayman Islands is to help attract money from foreign investors, and that the accounts provide no tax advantage to American investors like Romney. Romney, the campaign said, has paid all U.S. taxes on income derived from those investments.
“The tax consequences to the Romneys are the very same whether the fund is domiciled here or another country,” a campaign official said in response to questions. “Gov. and Mrs. Romney have money invested in funds that the trustee has determined to be attractive investment opportunities, and those funds are domiciled wherever the fund sponsors happen to organize the funds.”
Bain officials called the decision to locate some funds offshore routine, and a benefit only to foreign investors who do not want to be subjected to U.S. taxes.
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.”
“It helps U.S. investors avoid U.S. tax,” said Wilkins, “it helps foreign investors avoid taxes in their home country, so it’s not illegal or improper to set those funds up in a foreign jurisdiction, but it makes it more attractive to investors because it helps them avoid paying taxes on that income.”
http://abcnews.go.com/Blotter/romney-parks-millions-offshore-tax-haven/story?id=15378566&page=2#.TyBLgM1DHsI
*From AllVoices;
“According to a fascinating report on ABC’s Nightline on Wednesday, the exotic Caribbean island is the haven for 138 accounts of Bain Capital with over $130 million. Interestingly, these accounts lead to a post office box, number 908, not a physical company and he is just one in a long line of the super rich who use the Caribbean Islands as their ‘tax-free vaults.’ ”
http://www.allvoices.com/contributed-news/11328340-tax-haven-or-tax-evasion-mitt-romneys-offshore-accounts-in-the-caribbean
Anonster- Thanks for posting a lot of information otherwise available on the internet.
If you are saying that you must hold the POTUS to a higher standard, you have to develop what the “standard” is, so I would venture to say that what you and I do is very relevant since we would be part of that “standard”. WE as a country ask a lot of the great men and women in the armed services…I don’t believe it is just the POTUS who is asking them to defend us and putting their lives on the line each and every day. The POTUS is the Commander in Chief, yet we are part of it also. WE all have a responsibility to pay our taxes. Unfortunately, some people don’t while others have lobbied for certain exemptions and lower rates…that can be changed.
In response to your question on why would anyone open a foreign account except for tax purposes- There are a multiple of reasons which do not have to do with taxes. Here are a couple: when you do business in a foreign country, it is almost required to have one; when you receive payment from foreign countries, it is often easier to have a foreign account; when you make payments to foreign companies, it is often easier to have a foreign account; when you are making investments in foreign business, it is easier to do business with a foreign account. There are more- none of these have to do with evading or avoiding US taxes.
Remember, Bain invests all over the world, so having foreign accounts and even foreign domicile for certain investments certainly would make sense- pretty much every professional advisor would at least be exploring it. You yourself just said “investing in foreign companies is far different than opening bank accounts offshore”- it is very difficult to invest directly in private companies (i.e. not through a mutual fund or publicly traded foreign company) in a lot of foreign jurisdictions without having a foreign account.
I will get on a little bit of tax semantics now: there is nothing wrong with “avoiding” tax as long as it is legal (see the quote from the person you quoted from ABC) and according to the code. “Evading” tax is wrong both morally and legally. Tax evaders need to be dealt with. As I explain to my clients (yes, I am a tax professional)- you can choose to avoid the Toll Roads by going on the regular freeways however if you just run through the toll booth without paying, that is evasion and is illegal and you should expect to get punished. Hopefully that makes sense. Common avoidance techniques would be to utilize deferral techniques already discussed or even turning down a contract because for some reason you don’t want to pay the additional tax (nor do you get the cash)- sometimes that makes sense for various reasons believe it or not although that often is letting the tax tail wage the economic dog and not recommended.
If Romney is evading tax utilizing this structure, then he should be investigated, fined, taxed, and possibly even more. If he is just following his well paid professional advisors advice, then he is being a prudent business person. Whether following that advice should disqualify him from receiving votes, is for each of us to decide as long as we know the initial rules that are supposed to be followed. Being a prudent businessperson may not be the best qualification for being POTUS.
TJLocalSA,
To equate our powers as individual citizens to that of POTUS is just ridiculous and to further equate our “standards” of accountability is even more ridiculous.
Remember, no one is FORCING former Governor Romney to run for POTUS, he is offering himself up and we get to judge, tax returns matter, it shows where a candidate’s priorities and loyalties lie.
I remember candidate Barrack Obama having to give a speech defending himself because he attended a church, where the minister once said something controversial.
Appearances and deeds matter when you’re POTUS or running for POTUS and going to extreme lengths to avoid your tax burden, when it is already far lower than the average persons’, STINKS.
There is or at least was a “standard” for public service in this country, it meant putting your country above personal gain (Roosevelt and Kennedy, come to mind), I think that is a “standard” worth upholding.
Here’s another “standard” for you, how about the Commander-in-Chief paying at least as much in taxes as the average soldier? (average soldier pay $54,000 year/16.6% tax rate)
Romney’s tax haven’s are okay for a private citizen, but they are not okay for a President, because while they may be perfectly legal, they are NOT perfectly patriotic.
Anonster- I would agree that equating any one citizens’ power to that of the POTUS is ridiculous. It is also ridiculous to say that is what I had indicated. I was referring to the collective citizenry. Combined, the citizenry has a lot of power- they vote on those who make the laws and the POTUS. Regardless, arguing semantics and we probably are not actually that far apart on this issue in hind sight. I also think it is not ridiculous to indicate that if you are going to hold someone to a higher standard, one has to establish what the “standard” is- I am not sure what your actual hard standard is when it comes to tax compliance. Mine, in this instance, is following the laws to a higher extent than others in their same situation…after reviewing his return for 2010, it seems like he is- although, I do not have all of the information obviously. It is not extreme at all for someone of this net worth to do what he is doing- I would surmise that it is quite common. One may not agree with the methods he used, so they may not vote for him- I would hope he knows that beforehand.
Like I said, we probably are not terribly far apart on a lot of what you said. I agree we should hold politicians (esp the POTUS) to a high standard, they should be scrutinized, they should respond to that scrutiny, they should put country before self, etc…
I agree that tax reform is needed- obviously, the devil is in the details. We have an inherent problem with a taxing different types of income drastically differently. I would be OK in having some sort of minimum tax, oh wait, we have that and it is called the Alternative Minimum Tax which unfortunately those it hits the most are upper middle class to lower upper class taxpayers. Reform the AMT so that there is a true minimum tax rate for those with very high income. The gov’t has been in the business of picking winners and losers- homeowners vs renters, parents vs non-parents, older taxpayers vs middle aged, vision impaired vs no problem see-ers, charitable givers vs non-givers, investors vs wage earners, investment managers vs earners, those who can afford high quality tax advisers vs those who don’t have the means, companies who keep foreign profits over seas vs those who bring it back to the US, companies who employ those in certain areas vs those who are not in those areas, companies who receive subsidies in favored industries, companies who do research and development, it goes on and on and on. Reform the system and follow the rules. Regardless if the system is reformed, lets everyone at least follow the rules as they are today and then work on getting the reform done through Congress and POTUS. Flame on…
And don’t forget, we are only GUESSING what Mitt is hiding. It might be something different and worse than what anonster is speculating. The people who should be clamoring the most for the release, as was mentioned on the really excellent episode of Bill Maher last night, is Republican voters – he needs to be vetted by them before they’re stuck with him for good.
One activist wrote today that he suspected that Romney was hiding major contributions to Prop 8.
COOK YOU KNOW WHY THEY ARE TRYING TO FIND AS MUCH DIRT AS THEY CAN ON THIS GUY . IF HE TOOK CANDY FROM A STORE AT AGE 8 AND DID NOT PAY FOR IT ===== FRONT PAGE N.Y / L.A TIMES
He most likely gives pretty much gives to charity enough to cover all of his ordinary income thereby only paying an effective 15% rate on his long term capital gains and qualified dividends- don’t forget that his dividends were most likely already taxed at the corporate level. He indicated that he is playing by the rules and paying the proper amount of tax according to the laws of the land. I highly doubt he was not knowingly paying his full tax responsibility set by the tax code- maybe that is too low in some minds, which is debatable.
Should he pay more voluntarily? Only if he thought that he was paying too little I guess- and even those who think taxes should be higher generally are not making donations to the government.
As long as he is reporting his income and reporting his foreign activities as required, is he really doing anything wrong? This is a world wide economy. US companies buy products from all of the world. US companies sell products to all over the world. A lot citizens who have mutual funds have investment in foreign countries (even inside of their 401K’s, IRAs, etc…). Seems like he may have a more direct investment than most of us although he definitely has more money to invest. As a US citizen, we have to pay US tax on our worldwide income so even if it is invested overseas, he still should be paying the tax as appropriate under the tax code.
Santorum wins Iowa…..but there are 2 missing precincts left uncounted. Perry bails and then supports the “Newt Zoot”. Romney skips to my lou…….and play the dork card. “Newt Zoot Blingrich” meanwhile acts like Bill Clinton and is outraged that anyone would consider his sexual morays as suitable Presidential Credential Requirements. “Wife Swapping” was probably OK in his town in Georgia. OK, that leaves Dr. Ron Paul………a Doctor with no office to do those OBGYN exams…… Meanwhile, Herman Cain…..appears on the talk show circuit and throws his endorsement,….up for grabs – as if anyone cared.
This is all getting downright Looney Tunes…….ya think?
It looks like it will come down to a Romney-Gingrich-Paul free-for-all. I expect all three to be knocked out of the race. I’m preparing oppo on Sarah Palin.
(Actually, I’m being facetious, but I’m not sure how facetious. Or why!)
anoster yoU make me sick . YOUR NANNY STATE , OCUPOOP , SHARE HE WEALTH , UNION LOVING , CAPITAL GAINS MAKING MONEY SOMETHING YOU HATE PEOPLE TO DO .
Of course, Jon Stewart explains it best;
http://www.theatlanticwire.com/entertainment/2012/01/jon-stewart-explains-how-romney-got-his-low-tax-rate/47830/
I said: “You must pay a lot of taxes”. She said: “We don’t pay taxes. Only the little people pay taxes.”[11]
–Elizabeth Baum, former housekeeper to Helmsley (October 1983)
You little people protest too much.