From the WSJ:
“The so-called offshore account in the Cayman Islands…is an account established by a U.S. firm to allow foreign investors to invest in U.S. enterprises and not be subject to taxes outside of their own jurisdiction,” Mr. Romney said.Mr. Romney uses the term a U.S. firm to indicate himself, since he is the one who owns the Cayman Account.
Follow me under the orange hedge for why this matters......
We know for a fact that Mr. Romney is struggling to find a good answer in regards to his profiting from outsourcing American jobs. We know that these profits came directly to him through his ownership and leadership at Bain Capital.
The Cayman Account points at something more insidious. Not only does it appear that Mr. Romney directly profited from outsourcing of American jobs, he then created a Cayman Account to allow the overseas profits from outsourcing to be used to further fuel the acquisition and dismantling of American industry as venture capital. This assertion would be difficult to prove, as the Cayman Account is beyond scrutiny, but as this was his primary modus operandi for getting rich, it is well within the scope of the possible.
But let's return to facts. We know that Mr. Romney has paid large sums of money to his accountants in order to be exposed to the minimum amount of American tax liability. Mr. Romney himself has said that he has exercised all legal and available tax avoidance measures.
He has also been very reluctant to release additional tax years; admitting that there are thousands of pages to be reviewed and likely solid opposition research material to be had in those documents.
This is the other side of the Cayman Account coin. Not only did Mitt Romney diligently escape as many American taxes as legally possible, he also established an account to allow foreign investors escape as many American taxes as possible as well.
Mr. Romney would counter, of course, that all of this is legal. And he would be right. But he also understands that the moderate and independent voters in the US, who are the absolute key to his electoral success, have no stomach for a continued dialog on how the financial elite in this country enjoy ridiculously low tax liabilities. Nor would the spectre of helping foreign financial elites avoid American taxes be very palatable either.
There is a further part of this story as well, that goes beyond Mr. Romney, and also gives a clear indication of what he would encourage as President. For a moment, we need to consider Mr. Sheldon Adelson, of the Las Vegas Sands.
Mr. Adelson has been lavishly pouring money into this election cycle. If anyone can be accused of attempting to purchase elections this year, it would have to be him. What many people may not know is that Mr. Adelson makes the vast majority of his income from his Chinese gambling interests in Macao. The Macao operations are fantastically lucrative in comparison to the Las Vegas operations.
As a result, Mr. Adelson, along with many other international financial elites, has a strong inclination to desire repatriation of foreign profits with a minimum of tax burden.
Along with the disastrous and irresponsible domestic tax policy that Mr. Romney has already proposed, we should also expect a tax holiday on repatriation of foreign profits to be urged by him as President, thus further depriving the US Government from legal income and worsening the debt.
While Mr. Adelson has been reluctant to directly support Mr. Romney, it is clear that as individuals of massive wealth with international ties, they share the desire to ignore and evade the responsibilities of supporting the Governments that provide the structure in which they operate.
Under the Citizens United ruling, it has become much easier for financial elites to influence elections in their favor. The return on this investment will be guarantees of legislation that will support the reduction of their financial responsibilities to their Country.
The Republican Party has ignored budget deficits entirely during their periods of Governmental control, with Mr. Cheney famously saying "deficits don't matter". They have also aided and abetted the financial elites in the quest to avoid taxation to support the Government which they have conspired in growing.
We could only expect an extension and enhancement of this behavior under a President Romney.