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View Diary: Romney Parks Millions in Offshore Tax Havens UPDATE 2 (309 comments)

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  •  Where are you seeing (14+ / 0-)

    anything suggesting he is a tax cheat?

    One of the problems with our country is that provisions that benefit only the Romneys of the world are rampant in our tax code. There is nothing in the article, or anywhere else that I'm aware of, that suggests he is cheating on his taxes.

    Let's please stay reality-based.

    "These are not candidates. These are the empty stand-ins for lobbyists' policies to be legislated later." - Chimpy, 9/24/10

    by NWTerriD on Wed Jan 18, 2012 at 03:06:37 PM PST

    [ Parent ]

    •  What does "Tax Cheat" mean? (42+ / 0-)

      In linguistics, there are two schools of thought about word definitions. One school says words mean what scholars say they mean. The other school says, words mean what the common man uses them for.

      The common man does not use the words "tax cheat" to mean, exclusively, someone who broke the law regarding taxes. No, when most Americans use the words "Tax cheat" they mean someone like Romney, who is not technically breaking the law, but is, in the view of most, cheating the system anyhow.

      Funny thing about reality, anything you can say about it is merely theory. As Popper demonstrated, you can not communicate "facts" to others, even when you say something like "The grass is green." Grass is a theory. Maybe that plant isn't technically a grass. Green is a theory. Maybe that color is more aquamarine, maybe your audience is red-green color blind. They are not facts. Only direct perception is factual, this moment, right now, is true. Everything else is theory.

      Thus, calls to "join the reality based community" or "please stay reality based" should be seen for what they are, ad hominem fallacies, attacking the person making the argument instead of the argument itself. I assume that wasn't what you intended so consider this a helpful reminder.

      •  Bull puckey. (4+ / 0-)
        Recommended by:
        Paper Cup, AmericanAnt, buddabelly, Satya1

        Wasn't ad hominem at all. And if you read the response (below) by the person to whom my request was directed, it is clear s/he understood that, even if you don't.

        Most people on this site pride ourselves in being a reality-based community that communicates through facts. If you do not believe there is any such thing as a fact, that's your business, but I'll be just fine without any more of your "helpful reminders," thanks.

        "These are not candidates. These are the empty stand-ins for lobbyists' policies to be legislated later." - Chimpy, 9/24/10

        by NWTerriD on Wed Jan 18, 2012 at 03:41:35 PM PST

        [ Parent ]

        •  I wasn't saying it was ad hominem (6+ / 0-)

          I was saying, using the phrase "Please keep it reality based" is an ad hominem, whether you meant it that way or not, and I assumed you did not.

          Pride in being "reality-based" means intolerance to those who do not toe your line. And make no mistake, it is your line, not THE line. Not everyone on this site agrees with you as to what is "real."

          For instance, as I demonstrated, you take a prescriptivist view to definitions and think "tax cheat" means someone who breaks the written tax laws. Other people, who are equally "reality-based" believe in the descriptivist theory of language, that words mean what people commonly use them to mean. We think "tax cheat" can refer to someone who broke the unwritten social conventions around taxes, not just those who broke the law.

          But of course you chose to focus on my last paragraph, because you are unable to refute my line of reasoning. And you get all emotional about it as well. Huh. That is what you call "reality based?" Popper was right. You do know to whom I am referring, right?

        •  There's legal and then there's moral (0+ / 0-)

          The latter is the perception that the "little guys" are likely to take.

          Democrats promote the Common good. Republicans promote Corporate greed.

          by murasaki on Wed Jan 18, 2012 at 06:13:53 PM PST

          [ Parent ]

      •  Some Grass (3+ / 0-)
        Recommended by:
        drmah, Marie, Satya1
        No, when most Americans use the words "Tax cheat" they mean someone like Romney, who is not technically breaking the law, but is, in the view of most, cheating the system anyhow.

        That's pretty definitive for someone who thinks anything you can say about reality is merely theory.

        From a rhetorical standpoint, I think you weaken Romney's argument more by proffering that he's not a cheat - rather that he's doing just what the policy he advocates would lead any rational market participant to do.  And I think weakening the argument might be more powerful than discrediting the man - something Romney seems capable of without help.

      •  Seth - there is no moral, patriotic or legal duty (4+ / 0-)
        Recommended by:
        raines, Bensdad, BPARTR, PeterHug

        to pay more than the letter of the tax law requires.

        This quote is taken from an opinion written by Federal Appeals Court Judge Learned Hand, a progressive and one of the most respected and quoted federal judges of all time. It goes to your statement that you can be a tax cheat without breaking the law. That is not true as Judge Hand so eloquently states.

        "Anyone may arrange his affairs so that his taxes shall be as low as possible; he is not bound to choose that pattern which best pays the Treasury. There is not even a patriotic duty to increase one's taxes. Over and over again the courts have said that there is nothing sinister in so arranging affairs to keep taxes as low as possible. Everyone does it, rich and poor alike. and all do it right for nobody owes any public duty to pay more than the law demands."

        Gregory v Halvering
        69F.2d
        Judge Learned Hand
        US Court of Appeals

        "let's talk about that"

        by VClib on Wed Jan 18, 2012 at 05:54:11 PM PST

        [ Parent ]

        •  I disagree with judge Hand (0+ / 0-)

          Specifically, I disagree with him when he says there is no moral or patriotic duty to pay more in taxes than the letter of the law requires. Of course there is not legal duty to do so, but I ask this, if there is no moral or patriotic duty to do so, then why are people upset with Mittens for paying only 15% in taxes? Most Americans think Mittens has a duty to pay his fair share, whatever the law says. Most Americans think he is cheating the country out of its fair share. Most Americans think  Newt is a tax cheat, whatever the law and judge Hand say.

          •  Seth - of all the candidates who have run (0+ / 0-)

            for President, and released their tax returns, I don't think there has ever been a single return that showed that the candidate paid more than the law required.  While a few people do it each year, and there is a line on the tax return form to add an additional payment, it is extremely rare for anyone, including politicians, to make voluntary extra payments to the IRS.

            "let's talk about that"

            by VClib on Thu Jan 19, 2012 at 09:08:18 AM PST

            [ Parent ]

            •  Tell me something I don't know (0+ / 0-)

              They all cheat. All of the 1% cheat. We all know that. How does the fact that "every candidate does it" negate the popular sentiment that they shouldn't be doing it?

              I'm not talking about "voluntary extra payments." Nobody makes voluntary extra payments. I'm talking about hiring expensive lawyers to do things to your filings that ordinary people can't get done. People know it is legal, but they still think of it as unfair play, as the option is not open to everyone.

              Before we continue, though, I would like to make clear what we are debating. I am making no definitive statements as to whether he is breaking the law, cheating, or just doing what everyone else does. I'm saying that I believe the majority of US citizens think of what Mittens is doing as "cheating" on his taxes. That is all I am saying. Agree or disagree?

              •  Seth - I understand that you believe (0+ / 0-)

                that Romney is likely following the law, but still "cheating" and that most Americans agree with you. I just don't agree with you and most Americans. In my view if you are following the law, you are not cheating on your taxes. I am with Judge Hand on this one.

                "let's talk about that"

                by VClib on Thu Jan 19, 2012 at 09:55:52 AM PST

                [ Parent ]

                •  It's all semantics anyway (0+ / 0-)

                  The real question is not whether or not he is cheating. Cheating is just a word. The question is, is what he is doing right, yes or no?

                  Should the majority of Americans be angry that he is paying less than 15% when they pay more? Should they be angry at Mittens for taking advantage of these legal loopholes, or should they be angry at the system (that Mittens helped set up) that lets him do that?

                  Americans are angry that Mittens pays a lower tax rate than they do. Who should they be angry at, in your opinion?

                  •  They should be angry at Congress (0+ / 0-)

                    Congress is the only body that writes tax laws. There was a real opportunity to raise taxes on Romney and all the other 1% by letting the Bush tax cuts expire at the end of 2010. The President and the Dems just had to sit on their hands and let it go.

                    "let's talk about that"

                    by VClib on Thu Jan 19, 2012 at 10:56:14 AM PST

                    [ Parent ]

                    •  So, you are saying Mittens should be paying 15%? (0+ / 0-)

                      You seem to be saying, because it is legal to do so, Mittens should be paying the least he can, and that is not immoral. You seem of the opinion that people should not be mad at Mittens for this situation, they should be mad at congress and the president, am I reading you right?

                      •  Yes, they should be mad at Congress (0+ / 0-)

                        To the best of my knowledge Mitt Romney has never served in Congress or had any direct influence on the drafting of any tax laws. In my view it is not at all immoral, unethical, or unpatriotic, to follow the tax law and pay only what you owe according to the current IRS code. I am with Judge Hand on this who stated the position with much more eloquence than me. There is no such thing as the "spirit" of tax law, there is black and white. If you follow the code you have done all you have been asked by the federal government. If we want people like Mitt Romney to pay more we will have to change the tax laws. And if we do, he will pay more.

                        "let's talk about that"

                        by VClib on Thu Jan 19, 2012 at 11:55:29 AM PST

                        [ Parent ]

                        •  But you haven't answered the real question (0+ / 0-)

                          Should Mittens be paying more? I know I want him paying more, do you?

                          As to your second reply, why are capital gains taxed differently than other income? Shouldn't we simply say, income is income, most people can't choose whether their income comes from wages or investments, so we will tax it all the same?

                          And I know it is silly but I have to ask, that VC by your name, does it stand for "venture capital?"

                          •  I'll let people keep guessing on the VC part (0+ / 0-)

                            In the past 100 years there have been only two years in the US when capital gains and ordinary income were taxed at the same rate. Just after the Tax Reform Act of 1986 the top marginal rate was dropped to 28% and there was no discount for long term capital gains. I do not favor taxing earned income and capital gains the same. Nearly every country in the world with a viable investment community has a discount for long term capital gains income and taxing them at the same rate in the US would, in my view, be damaging to our economy. For a significant part of my professional life the long term capital gains rate was 50% of your earned income rate. If I had to pick a number I would probably go back to the Clinton era tax code of a top rate of 40%, the same for dividends and interest and a long term capital gains rate of 20%.

                            I do believe that lower tax rates on long term capital gains does benefit the economy, encourages capital formation, and creates an incentive for people to invest.

                            "let's talk about that"

                            by VClib on Thu Jan 19, 2012 at 01:06:53 PM PST

                            [ Parent ]

                          •  Why not give a tax break for investing, then? (0+ / 0-)

                            If you want to encourage investment, then give a tax break for doing that. It is nonsensical to think  that you can encourage investment by giving a tax break on the returns from investment. That is only rewarding people who have already invested, regardless of what they then do with the money. By giving a break to those who do invest, you encourage people to invest.

                          •  At one point we did that (0+ / 0-)

                            Prior to the Tax Reform Act of 1986 we gave people tax write-offs to invest in specific things that Congress thought had merit. All the investments were in the US. People could still have capital gains if they held the investment over a long period. Those "tax write-off", were eliminated in TRA86. Some people think that we should bring them back for investments in clean energy and other high value domestic programs. You do receive some tax benefit if you have a failed investment, but the tax benefit is limited to $3,000 per year.

                            "let's talk about that"

                            by VClib on Thu Jan 19, 2012 at 01:47:18 PM PST

                            [ Parent ]

                          •  It is socialism for the rich (0+ / 0-)

                            If you cut the capital gains tax to zero, it would not encourage very many more people to invest, because most people who can invest are investing as much as they possibly can. Oversees, where the return is better because the workers are more desperate. If you don't have the money, no amount of incentives will convince you to invest what you don't have.

                            If the capital gains tax were raised, personal income tax for the poor lowered, and incentives given for actually investing in American jobs, the whole economy would be healthier, as control of wealth would be more spread out and no one person would have as much control over the lives of other people as they do now.

                            The capital gains tax is government trying to regulate behavior by giving incentives to certain groups and not others. However, most people do not have the choice to invest, as they do not have the money. So this is socialism, but only for the rich, as usual.

                            Have you benefited from socialism for the rich? I haven't, and you know what? I don't want to. It feels unfair, and like most people, I care more about fairness than I do about personal gain.

                          •  Seth as a US taxpayer (0+ / 0-)

                            If you invest overseas your profit it is taxed by the IRS just like if you had invested in your home town. There is no tax benefit, for US taxpayers, from investing offshore.

                            "let's talk about that"

                            by VClib on Thu Jan 19, 2012 at 02:15:14 PM PST

                            [ Parent ]

                          •  Who said otherwise? (1+ / 0-)
                            Recommended by:
                            VClib

                            That is a problem, you get that tax break no matter where or how you invest. I am saying, rather than taxing the INCOME from investing differently, why not a tax break for actually INVESTING in America? I ask because it sounded earlier as if you were making the argument that this tax structure is good for America as a whole. Well, if you get the tax break even when you invest in foreign companies, then your earlier argument kind of flies out the window, doesn't it?

                            Do we, as a nation, tax INCOME from investing at a lower rate than income from working in order to benefit society as a whole? If that is our rationale for doing so, then we must keep those investments in America. If our rationale is actually "We just like to make rich people richer, and damn the cost to the rest of us" then we are doing a fine job.

                          •  I missed your point (0+ / 0-)

                            and agree that favorable capital gains treatment should only be for US investments.

                            "let's talk about that"

                            by VClib on Thu Jan 19, 2012 at 02:24:59 PM PST

                            [ Parent ]

                          •  My main point is this: (0+ / 0-)

                            If we want to reward investment, then give a tax break for investing. Giving a tax break on the INCOME gained from investing is not the same thing. Income is income, it is what you do with it that matters, not how you got it. We are rewarding people who got their income in a particular way, but 99% of the people don't get to choose whether their income comes from investing or work. You can't incentivize those people into investing by giving a tax break to people who have already invested and made a return. This just seems like basic common sense to me, yet people continue to confuse investing with income.

                          •  Seth - well I don't agree with that statement (0+ / 0-)

                            Capital gains treatment for long term gains is a powerful incentive for people to invest. I see it every day. The Obama administration were advocates for a two year period, which just ended this last December, for a very special capital gains tax rate of zero. For people who invested in startups between January 1, 2010 and Dec 31, 2011, and kept their stock for five years, there will be no capital gains tax on any gains - ZERO. These gains will not even be in the calculation for AltMin. I saw how this tax feature very substantially motivated private investors to act before the window closed last Dec.

                            "let's talk about that"

                            by VClib on Thu Jan 19, 2012 at 03:54:29 PM PST

                            [ Parent ]

                          •  You could have a different powerful incentive (1+ / 0-)
                            Recommended by:
                            VClib

                            Rather than rewarding people after the fact for having the good luck to turn a profit on their investments, which is just a form of income, you give a rebate on ANY form of income that gets invested. Right now, you only get the benefit when you reinvest investment income. I am asking, why? Why not give a tax rebate on any sort of income that gets invested, if promoting investment is the goal?

                            In most other areas where the government wants to influence economic activity, it gives a tax rebate for the spending side of things. With investment, you get a rebate on the income side of things. Investment INCOME is treated differently that other income, when what we really should be doing is treating investment EXPENDITURE differently than other expenditures.

                          •  Seth - I think you have a very valid point (0+ / 0-)

                            As I mentioned we did this prior to 1986, although you also qualified for capital gains if the investment worked out as well.

                            "let's talk about that"

                            by VClib on Fri Jan 20, 2012 at 08:43:35 AM PST

                            [ Parent ]

                      •  Seth - the capital gains rate could be 20% (0+ / 0-)

                        It should probably be higher, but we could have moved the capital gains rate to 20% and the dividend rate to 40% by just letting the Bush tax cuts expire. The President and Dems in Congress had all of this under their control at the end of 2010 and just had to sit on their hands, but lacked the political courage. Be mad at them.

                        "let's talk about that"

                        by VClib on Thu Jan 19, 2012 at 12:00:51 PM PST

                        [ Parent ]

    •  It appears that the tax code is the cheat. But (19+ / 0-)

      that isn't going to help Mitt if it was legal but very wrong.

      Empathy is going to change the world.

      by Mayfly on Wed Jan 18, 2012 at 03:30:05 PM PST

      [ Parent ]

      •  the BIG PICTURE: offshoring and the .1% (2+ / 0-)
        Recommended by:
        Creosote, Azazello

        There was a review article in the London Review of Books some months ago by David Runciman that puts Mitt Romney's offshore tax avoidance in a larger perspective. It starts off with a very good summary history of offshoring and then proceeds to consider its political implications (including the race to the bottom among US states to lower taxes to attract businesses), and why it was allowed to happen in the first place. Here are a few sample paragraphs, though I highly recommend reading the whole thing:

           ...Once this process began, it also unleashed a new wave of competition between individual American states to offer the most hospitable, least intrusive regulatory environment for outside companies to work in. Leading the way was little Delaware, which had always tried to compensate for its lack of size by being open for any business. Since the 1980s more and more corporations have moved to Delaware to take advantage of the state’s extreme laissez-faire attitude to the rights of shareholders and employees against company managements. If you took your business to Delaware (and this was often just a question of establishing a shell office and filling in some forms), it would be much harder for anyone to prove anything against you, because the Delaware courts did not think that much of what you did was any of their concern. Again, other states faced a choice: they could try to isolate Delaware by tightening up their own standards or they could try to compete for a share of the spoils. Enough of them decided to compete to start a race to the bottom. Offshore had moved onshore.

            [....]

            [But what] about Washington, where the shift to an offshore mindset at the national level might be expected to run up against some serious political opposition? What happened to the representatives of all those people who don’t have lots of money to move around, who can’t relocate even if they wanted to, and who have an interest in a fair, open and broadly progressive tax system? Didn’t they notice what was going on?

            This is the question that Jacob Hacker and Paul Pierson tackle in Winner-Take-All Politics. They don’t spend much time talking about offshore, but the story they tell has striking parallels with the one laid out by Shaxson. One of the ways you can identify an offshore environment, according to Shaxson, is that local politics gets captured by financial services. In that sense, Washington has gone offshore: its politics has been captured by the interests of a narrow group of very wealthy individuals, many of whom work in finance. For Hacker and Pierson this, more than anything else, explains why the rich have got so much richer over the last 30 years or so. And by the rich they don’t mean simply the generally wealthy; they mean the super-rich. The real beneficiaries of the explosion in income for top earners since the 1970s has been not the top 1 per cent but the top 0.1 per cent of the general population. Since 1974, the share of national income of the top 0.1 per cent of Americans has grown from 2.7 to 12.3 per cent of the total, a truly mind-boggling level of redistribution from the have-nots to the haves. Who are these people? As Hacker and Pierson note, they are ‘not, for the most part, superstars and celebrities in the arts, entertainment and sports. Nor are they rentiers, living off their accumulated wealth, as was true in the early part of the last century. A substantial majority are company executives and managers, and a growing share of these are financial company executives and managers’....

        Link

        The books under review, by the way are:

           Treasure Islands: Tax Havens and the Men who Stole the World by Nicholas Shaxson, Bodley Head, 329 pp, £14.99, January 2011, ISBN 978 1 84792 110 9

            Winner-Take-All Politics: How Washington Made the Rich Richer – and Turned Its Back on the Middle Class by Jacob Hacker and Paul Pierson, Simon and Schuster, 368 pp, £11.50, March 2011, ISBN 978 0 00 000097 2


    •  Bribing lawmakers with the campaign money (10+ / 0-)

      they need to stay in office is cheating.

      "And now we know that government by organized money is just as dangerous as government by organized mob." -- FDR

      by Mogolori on Wed Jan 18, 2012 at 03:30:25 PM PST

      [ Parent ]

    •  You are correct (49+ / 0-)

      I have to assume what he is doing is perfectly legal until I get more facts and that Romney had an army of lawyers, accountants and MBAs help him do this.

      I have been involved in alot of cases where the issue of how, where and why these accounts or trusts were set up arises. This can be a very messy and gray area.

      However, taking advantage of tax loopholes to avoid paying taxes that are not available to every one else is cheating in my book, legal or not.

      The point is I view this as a political disaster for Mittens no matter how many lawyers, accountants and legislators line up to say this is perfectly legal. It will still be viewed by the majority as cheating and unfair.

    •  even if it's "legal," I'd still consider these (22+ / 0-)

      money havens a form of cheating the government.

      His silence says everything we need to know.

      by livjack on Wed Jan 18, 2012 at 03:32:06 PM PST

      [ Parent ]

    •  It's definitely not tax cheating. (2+ / 0-)
      Recommended by:
      Argyrios, VClib

      This is just how investment funds are run.  

    •  How about "tax avoider" then? (20+ / 0-)

      Going the extra mile (or in this case a few hundred extra miles) to hide one's income in offshore tax havens may be perfectly legal -- or it may not be, depending:

      Citizens of the United States use Cayman as a tax haven for two purposes: tax evasion and tax avoidance. Tax evasion is the illegal hiding of income or assets for the purp ose of deceiving the U.S. Internal Revenue Service... Tax avoidance is any legal measure used to lower actual tax liability. U.S. taxpayers routinely use Cayman for both reasons. The legal method of using the Cayman tax haven is to form a corporation under Cayman law and assign a stream of income to that corporation. The corporation, however, must have a legitimate business purpose other than the avoidance of taxes. The business purpose need not require Cayman as the location, but Cayman must be appropriate for the business purpose.

      (The cited article is well referenced, if anyone's interested.)

      One would assume that the Mittster can probably afford all of the legal help required to ensure that all of the needed steps were taken to ensure that the IRS would regard his Cayman accounts as legal tax avoidance, assuming that they would ever look. Of course, it's unlikely any of us will ever see these details.

      But nobody held a gun to Mitt's head and forced him to legally avoid paying the taxes which other American citizens don't have the means to avoid, because, well, offshore tax havens are pretty much exclusively for the already rich.

      You know, because they can create lots of jobs by hiding tax-free money in the Cayman Islands.

      "But there is so much more to do." - Barack Obama, Nov. 4, 2008

      by flitedocnm on Wed Jan 18, 2012 at 03:36:51 PM PST

      [ Parent ]

      •  mitt wasnt avoiding tax; (2+ / 0-)
        Recommended by:
        Argyrios, VClib

        US charities and pensions were.  They set them up offshore so that those entities can avoid tax.

        •  HUH? (4+ / 0-)

          It's Mitt's money. Precisely how is he not responsible for using these shelters?

          In theory, there is no difference between theory and practice; but in practice, there always is a difference. - Yogi Berra En théorie, il n'ya aucune différence entre théorie et pratique, mais en pratique, il ya toujours une différence. - Yogi Berra

          by blue aardvark on Wed Jan 18, 2012 at 03:52:21 PM PST

          [ Parent ]

          •  he gets no tax benefit from it. (2+ / 0-)
            Recommended by:
            Argyrios, VClib

            The benefit is for the investors: US charities and pensions avoid ubit tax, and foreigners don't have to disclose their info to the IRS.

            But because the offshore makes an election to be treated as a US partnership, from a tax perspective these entities aren't Cayman Islnds entities; they're US partnerships.  

            •  Thank you, thank you... (2+ / 0-)
              Recommended by:
              Argyrios, johnny wurster

              For a breath of reason and understanding.

            •  No (2+ / 0-)
              Recommended by:
              Marie, flitedocnm

              A Cayman Islands entity that makes an election under 301.7702 to be taxed as a partnership does not become a U.S. partership by virtue of such election.  It becomes a foreign partnership.

              Also, pension funds (or other tax-exempt investors) do not avoid UBTI by investing in an offshore fund;  the structure that allows them to avoid UBTI is to use a blocker corporation to funnel the investment to the offshore fund.

              "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

              by Old Left Good Left on Wed Jan 18, 2012 at 05:33:38 PM PST

              [ Parent ]

              •  Yes (0+ / 0-)

                For US tax purposes, a foreign partnership is treated just like a US one.  Blocker corps are always foreign entities.

                •  well you and OLGL are certainly (0+ / 0-)

                  raising MY awareness. and i hope that's a good thing. ;)

                  Addington's perpwalk is the trailhead of accountability for this wound to our national psyche. (But go ahead and arrest Rumsfeld, too.)

                  by greenbird on Thu Jan 19, 2012 at 04:18:24 AM PST

                  [ Parent ]

                •  No (1+ / 0-)
                  Recommended by:
                  flitedocnm

                  A foreign partnership is a foreign partnership is a foreign partnership.

                  There is a difference between "taxed as a partnership for U.S. tax purposes" and a "U.S. partnership."  For example, all U.S. partnerships (i.e., those organized in a state or D.C.) must file a U.S. tax return.  A foreign partnership--even one that makes an election to be taxed as a partnership for U.S. tax purposes--files only if it has a U.S. trade or business, or income effectively connected with the United States.  Withholding rules are also different.

                  "Well, I'm sure I'd feel much worse if I weren't under such heavy sedation..."--David St. Hubbins

                  by Old Left Good Left on Thu Jan 19, 2012 at 08:15:03 AM PST

                  [ Parent ]

            •  none the less: we should USE THIS for.... (2+ / 0-)
              Recommended by:
              OleHippieChick, dannyinla

              ... all it's worth.

              Look: it doesn't matter if he broke the law. What matters is to get him to deny that he broke the law.

              We are at war: the climate war, the culture war, the class war, and the basic sanity war.  That's war on all fronts.  And the way to win is to do whatever works (except: no violence, and nothing more illegal than a sit-in).  

              If smearing Romney by using words like tax cheat and Cayman Islands costs him votes, then that's what we have to do.  Let him "explain himself."  Make him explain himself!  

              He who attacks, wins!

              He who explains, loses.

              "Minus two votes for the Democrat" equals "plus one vote for the Republican." Arithmetic doesn't care about your feelings.

              by G2geek on Wed Jan 18, 2012 at 11:13:18 PM PST

              [ Parent ]

        •  Aren't these the tax loopholes (5+ / 0-)
          Recommended by:
          johnny wurster, Brit, drmah, laurnj, pademocrat

          that Obama has been trying to close?

        •  This is called tax avoidance (4+ / 0-)

          This is exactly what investment advisors and tax accountants 'sell' you: ways of limiting your liabilities by moving funds around.

          "It is only for the sake of those without hope that hope is given to us." Walter Benjamin. More sane debate on the Moose

          by Brit on Wed Jan 18, 2012 at 04:28:27 PM PST

          [ Parent ]

          •  A lot of that stuff has been shut down (7+ / 0-)

            though it was more rampant, I understand, in the 90s. Now marketed tax shelters are rather severely punished and the IRS has lots more flexibility to ban them by designating illegal "listed transactions" at the administrative agency level.

            I don't think what Romney is doing is avoiding US taxes. As a US citizen he is taxed on his worldwide income, even if it is earned offshore.  A lot of funds are set up in these types of jurisdictions to avoid taxes on the fund itself or foreign withholding taxes on worldwide investors, not income taxes imposed by the investor's own home country. The Cayman Islands contracts with funds to guarantee, for a small fee, that it will be immune to all Cayman Islands taxation for periods of up to 50 years or more, regardless of future law -- that's one thing that makes it an attractive jurisdiction.

            This isn't to say that there are very dishonest games you can play with international borders -- shifting income-producing assets out of the US tax net at below-arm's-length cost is, I think, a big problem these days. But that's not what Romney is doing.

            I hate to be in the position of defending him, and I understand that the optics are bad for him, and that's a good thing. But if you have a substantial amount of money to invest, and you are looking at the types of funds that take minimum subscriptions of $100,000, it's just a fact that you are going to be looking at a lot of Cayman entities.

            •  But only when he receives the income! (2+ / 0-)
              Recommended by:
              tardis10, BPARTR

              I don't know the specifics of his offshore vehicles, but the big advantage of having an offshore corporation is that while U.S. taxes are paid on money that you pull out of the corporation, it can grow within the corporation tax-free.  As long as the corporation doesn't do business in the Caymans, it doesn't pay Caymans taxes, and you don't pay U.S. taxes until you get paid (either by salary, dividend, or selling your stock).  There's a description of how this works here.

              PROUD to be a Democrat!

              by leevank on Wed Jan 18, 2012 at 06:55:53 PM PST

              [ Parent ]

              •  The article (0+ / 0-)

                does not appear to mention the controlled foreign corporation, passive foreign investment company, or personal holding company rules. I wonder if the author is aware of those or just chose to ignore them? Also it apparently was written 16 years ago, and I would not rely on it today.

        •  Charities don't PAY taxes! (2+ / 0-)
          Recommended by:
          Yosef 52, Gator Keyfitz

          Charities have no need for offshore entities to protect themselves from U.S. taxation, since they don't pay taxes to begin with.  Ditto for pension funds.  Your comment thus makes no sense at all.

          PROUD to be a Democrat!

          by leevank on Wed Jan 18, 2012 at 06:50:02 PM PST

          [ Parent ]

      •  Yet He's Been Running For Public Office For Years (12+ / 0-)

        ...for Pete's sake.

        He knew his returns were going to be an issue and still he held the money off shore.  He's got the worst political instincts I've ever seen.

        •  maj - it's not his decision (0+ / 0-)

          Some of the Bain investment funds are located there as a convenience for non-US investors. Romney has no choice in this issue.

          "let's talk about that"

          by VClib on Wed Jan 18, 2012 at 06:00:47 PM PST

          [ Parent ]

          •  Still It Makes Terrible Optics. If You Know You're (1+ / 0-)
            Recommended by:
            tardis10

            running for POTUS, why not sell or otherwise shed the off shore investments?  He could absorb any losses.  

            Either he had some dodge planned or his $$$ mean more to him than sitting in the Oval Office.

      •  We don't even have to label Romney, what this (1+ / 0-)
        Recommended by:
        flitedocnm

        info does is draw attention to the problem that created OWS in the first place: Wall Street and the 1% rig the system to make themselves richer and more powerful.

        It stinks, it's un-American. He's participating in a system that enables the drug trade and empowers the drug cartels, for one thing.

        This will hurt Romney if it's brought out and framed in the right way.

    •  Most likely he's parking his money legally... (9+ / 0-)

      And employing a few tax accountants and lawyers to ensure that he stays within the law--though not the spirit of the law. (Thus upholding the working motto of plutocrats,offshore criminals, and global banks--whatever is not explicitly illegal is legal--as opposed to whatever is not explicitly legal is illegal.  That gray area defines most wealthy individuals and large companies that can move money faster than a government can blink its eyes.

      Yes, we have a systemic problem that is exacerbated by legislators for hire.  However, if we can't call a cheat a cheat--whether or not it is textbook legal, then we are not reality based.

      The business of Progressives is to go on making mistakes. The business of Conservatives is to prevent mistakes from being corrected.

      by Agent Orange on Wed Jan 18, 2012 at 03:42:19 PM PST

      [ Parent ]

    •  Of course it legal (19+ / 0-)

      he's running for president, for pete's sake.

      Is it patriotic? Not so much.

    •  Of course he's a tax cheat (9+ / 0-)

      I don't even know what you're talking about.

      But nobody's buying flowers from the flower lady.

      by Rich in PA on Wed Jan 18, 2012 at 03:59:26 PM PST

      [ Parent ]

      •  Cheating doesn't have to be illegal, just UNFAIR. (9+ / 0-)

        This is not a game.  This is voters hard earned money having to be paid because Wallstreet M. Robot did not pay his fair share.  He cheated every one of those voters.

        And using those gains to get elected POTUS is just cheating again, especially as he wants to rig the law to siphon even more $ from tax-payers for himself and his filthy rich New Aristocracy pals.

        He's cheating tax payers.  He's cheating school kids.  He's cheating my sick mother and yours.  

        And he knows he is.  Why doesn't he try this excuse on his church?  B/c they'd say 'you're greed is a sin, Mr. Robot."  And they'd be right.

        BTW, stop being wusses.  He's a tax cheat.  Make him deny it.  Every day.

      •  For Gosh Sakes, He's a Republican. What do you (1+ / 0-)
        Recommended by:
        annieli

        expect?

    •  Then what did it mean when the Obama (0+ / 0-)

      administration was going after people who were sheltering money in Europe to avoid taxes?  It seems to me there was a Swiss bank involved, if my memory serves me correctly.

      "They love the founding fathers so much they will destroy everything they created and remake it in Rush Limbaughs image." MinistryofTruth, 9/29/11

      by AnnieR on Wed Jan 18, 2012 at 04:44:40 PM PST

      [ Parent ]

    •  "tax cheat" makes a better sound bite (1+ / 0-)
      Recommended by:
      Matt Z

      Newt will use it for that reason, and so should we.

      Never attribute to stupidity what can be adequately explained by malice; stupid people couldn't hurt us so effectively.

      by Visceral on Wed Jan 18, 2012 at 04:49:05 PM PST

      [ Parent ]

    •  The point isn't that it's illegal, it's the hope (5+ / 0-)
      Recommended by:
      drmah, miracle11, Marie, OleHippieChick, Matt Z

      that a majority of the electorate will view it as immoral.

      An out of the closet athiest who paid every penny of the taxes he would owe if he didn't take advantage of a single tax exemption or loophole could not presently win the US presidency. That's pretty crazy, but that's reality.

      Denying the presidency to a guy who doesn't want to pay his fair share to live in a country that makes his quality of life possible seems reasonble by comparison.

      It's about values. Socking away millions because you don't want to pay a fraction of it to support your country, perfectly legal as it is, will, fingers crossed, make Romney thoroughly unelectable to the presidency.

      Ds see human suffering and wonder what they can do to relieve it. Rs see human suffering and wonder how they can profit from it.

      by JTinDC on Wed Jan 18, 2012 at 05:16:03 PM PST

      [ Parent ]

    •  He's a legal tax cheat. (1+ / 0-)
      Recommended by:
      Matt Z

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