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U.S. Republican presidential candidate and former Massachusetts Governor Mitt Romney gestures while making a point about children's education at The Latino Coalition during the Annual Economic Summit at the U.S. Chamber of Commerce in Washington, May 23,
Relatively few of us understand exactly how Mitt Romney has used his offshore investments to reduce his taxes by how much. Romney hopes to use that confusion to claim that all the money he has in the Cayman Islands hasn't actually reduced his taxes, saying straight up that he's gotten "not one dollar of reduction in taxes" from his Cayman investments or Swiss bank account. But the New York Times' Michael Luo and Mike McIntire conclude that personal tax reduction may not be Romney's biggest Cayman advantage:
A review of thousands of pages of financial documents and interviews with tax lawyers found that in some cases, the offshore arrangements enabled his individual retirement account to avoid taxes on its investments and may well have reduced Mr. Romney’s personal income tax bills.

But perhaps a more significant impact of Mr. Romney’s offshore investments has been on the profit side of the ledger — in the way Bain’s tax-avoidance strategies have enhanced his income.

In other words, Bain avoided the taxes through complicated offshore investment strategies, increasing Romney's profits. Then, Romney's own tax bills on those tax avoidance-inflated profits were, most likely, further reduced by the location of his investments in the Cayman Islands and other notorious tax havens. It's so simple, I wonder why you or I didn't think of that. Oh, right:
...these tax-avoidance strategies are woven into the fabric of Bain’s deal making. While hardly a novel concept and not unique to Bain, the inevitable result is that elite investors like Mr. Romney are able to increase their fortunes in ways unavailable to most taxpayers.
And whatever Romney has done with his personal taxes (a question we know much less about than we should, thanks to his secrecy), he created Bain, with all its tax-avoidance strategies. He's asking us to just trust him on that "not one dollar of reduction in taxes" thing when it comes to the years of tax returns he won't make public. Does that kind of trust sound like a good thing to you?

Originally posted to Laura Clawson on Tue Oct 02, 2012 at 07:36 AM PDT.

Also republished by The Bain Files and Daily Kos.

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Comment Preferences

  •  This story was on the front page of my paper today (11+ / 0-)

    That was nice to see. However, this is the same paper that endorsed Mitt for Pres on Sunday. It's like two different editorial positions - the one reflected in the "news" part of the newspaper; and the one reflected by editorials.

    " can’t find any oxygen from outside the aircraft to get in the aircraft, because the windows don’t open. I don’t know why they don’t do that. It’s a real problem." Mitt Romney

    by Catte Nappe on Tue Oct 02, 2012 at 08:46:45 AM PDT

    •  Front page of the NY Times, also online (4+ / 0-)

      Here is the link:

      See, that's just all part of the Bain "package" for investors and tax chiselers.   Wonder why Bain had such excellent returns on investments?

      They were:

      Artful Dodgers, Inc.

      So, hey, it's all "legal", right?  They were just smarter than other people, you know, those SMALL people, the moochers and the victims, who had to (ahem) actually pay higher taxes than the Bain folks.  Kind of Darwinian, isn't it?  The rich get rich, the poor get the shaft, and then the indignity of having Mitt Romney call them hopeless moochers.

      Everyone? GET OUT AND VOTE.

      •  PBO should mention "Son of Boss" (1+ / 0-)
        Recommended by:

        if he gets the opportunity during the debates. Possibly the biggest tax-avoidance scheme uncovered by the US Govt. Romney was on the Board and the head of the auditory panel that approved its methods. Pretty damning evidence of Romney's long career of illegal tax avoidance:

        •  Tax dodger, draft dodger, tithe dodger, and (2+ / 0-)
          Recommended by:
          vcmvo2, bontemps2012

          investor in business that specializes in being a hostile takeover of American businesses in order to suck out as much profits and squeeze out whatever extra wealth as possible for his privileged investors and himself while taking pleasure in firing American workers...where does the dodginess end?

          How can he justify such a parasitical and dodging lifestyle as being more deserving of being president than Obama?  When he takes over a company he destroys 'the say' any employees and most of the managers may have had in helping the business do well and do right by it's customers and for employees as well as owners. He transforms that business all right--into a closed dictatorship with one objective, transferring as much profits and wealth into the hands of the external private equity firm that views them as being a game piece to play with, like all the shell companies they set up here and abroad to game the system.  There is no love, no blood, sweat and tears, no real skin in this game. It's all an abstract, cold game of stuffing as much in the wallets of the privileged elite as possible and to hell with anyone else's concerns. That's business as usual for the Romneys and it's certainly not Main Street American, Wall Street American/globalist perhaps, but nothing reflective of Main Street business values.

          When life gives you wingnuts, make wingnut butter!

          by antirove on Tue Oct 02, 2012 at 10:56:34 AM PDT

          [ Parent ]

  •  The scheme gets a ringing endorsement from W- (7+ / 0-)

    I'm not liberal. I'm actually just anti-evil, OK? - Elon James White

    by Satya1 on Tue Oct 02, 2012 at 08:54:20 AM PDT

    •  Keep It Simple for W. (0+ / 0-)

      it is simple:

      1. "Earn" some money through one of Bain's borrow-and-dump or smash-a-company-and-grab-the-pension-fund schemes.

      2. Move that legally taxable income to an offshore company that sits in the Caymans.

      3. Have that primary offshore company owned by a Blocker Company in the Caymans.

      4. Have the Blocker Company owned by Mitt Romney's retirement account.


      Simple as that.

      Yes, it is totally illegal. Not "gray area." Felonies for everybody involved.

      Almost impossible to get evidence, however, because the U.S. does not have subpoena power in the Caymans. Not yet.

      P.S. I do think we invaded Grenada over one helluva lot less than stealing billions in tax dollars. SEND THE MARINES !! For once in my lifetime get something back after wasting all this money on the military.

      I betcha we can find somebody there we can beat, too. There's got to be somebody somewhere. Illiterate Afghans maybe not, but there's always the Caymans....

  •  the angle's in the policy's in the angles and the (4+ / 0-)
    Recommended by:
    shoeless, phonegery, Matt Z, bontemps2012

    devil lives in the US offshoring capital in foreign locations

    yksitoista ulotteinen presidentin shakki. / tappaa kaikki natsit "Nous sommes un groupuscule" (-9.50; -7.03) 政治委员, 政委‽ Warning - some snark above ‽

    by annieli on Tue Oct 02, 2012 at 08:56:52 AM PDT

  •  And As Long As The Attention Of The Public (5+ / 0-)

    In other words, Bain avoided the taxes through complicated offshore investment strategies

    Is diverted away from the people who created the laws which made all of this legal in the first place, nothing will change.

    I won't be coming home tonight, my generation will put it right - Genesis 9:3

    by superscalar on Tue Oct 02, 2012 at 09:00:04 AM PDT

    •  Of course the ones who are benefitting the most (3+ / 0-)
      Recommended by:
      417els, bontemps2012, vcmvo2

      from these tax laws are the very ones who wrote them.  Very few, if any of our legislators can understand in any detail what they have voted for.  The language is purposely written to be confusing to anyone other than the authors.  Only a select few in Congress are told what the tax bills really contain, and those legislators are also benefiting, in one way or another.

      It's as if some form of mass hallucination has hit half the country.  How anyone can trust this sleazy bastard to be our President, I just cannot understand.

      Skeptical scrutiny is the means, in both science and religion, by which deep thoughts can be winnowed from deep nonsense. Carl Sagan

      by sjburnman on Tue Oct 02, 2012 at 09:24:14 AM PDT

      [ Parent ]

  •  When middle class and low income whites... (4+ / 0-)

    ...are so ready to vote for an amoral vulture capitalist and so many veterans are ready to vote for a draft evader who protested in favor of the Viatnam war and so many evangelical fundamentalist are ready to vote for a cult member, IMO it can only be because racism trumps everything else.

    That an African American can be a good POTUS seems to make them go crazy.  A smart Negro?, nah that doesn't exist, they must have cheated these liberal communist fascist Democrats.  Since the Dixiecrats came over to the Republican party the Democrats are not what they used to be.  The South will rise again!

    I don't know.  Help me understand.

    Daily Kos an oasis of truth. Truth that leads to action.

    by Shockwave on Tue Oct 02, 2012 at 09:03:07 AM PDT

  •  Obama's "brain fart" default debate line... (5+ / 0-)

    ... should be "and anyways, the question people should be asking is why Romney won't release his taxes? What's he hiding?"

    Mr. President, are you covering up what happened in Benghazi :

     "No. And speaking of cover-up...the question people should be asking is why Romney won't release his taxes? What's he hiding?"

    Mr. President, are you part of the Solyndra scandal?

    "No, and it's not a scandal. If you want scandal....the question people should be asking is why Romney won't release his taxes? What's he hiding?"

    Mr. President, did you personally authorize fast and furious?

    "No. But Mr. Romney authorized his crap tax returns that he won't release.... the question people should be asking is why Romney won't release his taxes? What's he hiding?"

    etc. etc.

    No snowflake in an avalanche ever feels responsible.

    by Magster on Tue Oct 02, 2012 at 09:04:34 AM PDT

    •  Unless The Debate Is On Limbaugh (0+ / 0-)

      Those will not be the questions. Nor are they questions liberals and progressives worry about. More troubling and tougher are a) Wall St. Reform and b) the drone program.

      Time is an enormous, long river, and I’m standing in it, just as you’re standing in it. My elders are the tributaries, and everything they thought and every struggle they went through & everything they gave their lives to flows down to me-Utah Phillips

      by TerryDarc on Tue Oct 02, 2012 at 09:15:02 AM PDT

      [ Parent ]

  •  R-Money is a scheming fraud (1+ / 0-)
    Recommended by:

    This guy has some nerve running for president.

    "The real wealth of a nation consists of the contributions of its people and nature." -- Rianne Eisler

    by noofsh on Tue Oct 02, 2012 at 09:04:45 AM PDT

    •  Cheating on taxes is his #3 scandal. (0+ / 0-)

      This has to be #1.

      Sitting at 6,700 social media SHARES and 940 FB Likes:

      Mitt Romney's Driving Killed Leola Anderson. His Cover-Up Tale is Proved Dishonest

      The driving was worse than stupid. Mitt Romney's cover-up tale begins with slandering a Catholic bishop and gets worse from there.

      Scandal #2 seems to be claiming that he almost died and was in a "three day coma" from the car wreck -- so everybody should pity the poor boy.

      We've got a diary up on that one. Links at the profile page.

      Romney got caught lying, because the victim's obituary in the Ogden Standard-Examiner -- day after the accident -- says he had a "minor head injury." Plus their reporter took Mitt's picture while he was talking to him and we've got it.

      He's rich. He's a loser.

  •  Speak for yourself!! (3+ / 0-)
    Recommended by:
    TerryDarc, phonegery, bontemps2012
    It's so simple, I wonder why you or I didn't think of that.
    I personally "saved" over $17 on such a scheme last year.

    And it only cost me about $13,743.22 in high priced accountant fees.  But to me it was well worth it to stick it to The Man.

  •  Consult Your Tax Adviser (4+ / 0-)
    Recommended by:
    TerryDarc, phonegery, 417els, antirove

    I always laugh when I read that statement....What tax adviser?  All our income is documented, either interest in US Mutual Funds or banks and from wages.  My tax adviser is TurboTax.  Wonder if they have options regarding hiding money in the Caymans.

    •  Turbo-Cayman Option Available... (2+ / 0-)
      Recommended by:
      bontemps2012, TomFromNJ

      ...$149.95 at Egghead. Expensive, but I hear your IRA will be over $100,000,000 within 5 years.

      Time is an enormous, long river, and I’m standing in it, just as you’re standing in it. My elders are the tributaries, and everything they thought and every struggle they went through & everything they gave their lives to flows down to me-Utah Phillips

      by TerryDarc on Tue Oct 02, 2012 at 09:27:43 AM PDT

      [ Parent ]

  •  Please. Is this really a big deal? (0+ / 0-)

    We all laughed when the press tried to make a big deal about Senator Kerry avoiding paying the MA yacht luxury tax by mooring his boat in RI.  

    If rich guys can't run for office anymore, the herd of candidates is going to get really thin.  I only can imagine what they would to to FDR today.  

    Policy is what does it for me, not classism.  Sadly, though, that seems to work for most of the rest of the electorate.  

    He only employs his passion who can make no use of his reason. - Cicero

    by SpamNunn on Tue Oct 02, 2012 at 09:08:33 AM PDT

    •  And how is President Kerry these days? (2+ / 0-)
      Recommended by:
      skyounkin, vcmvo2

      Oh, wait . . .
      It's not about his wealth, although Romney's is far above what we're used to seeing from candidates for President--it's about his being so wealthy that he is incapable of understanding what life is really like for 99% of the country he wants to run. His lack of empathy, let alone any shred of common sense, is what makes his wealth a real concern.
      You don't have to be a member of the working or middle class to work for us, but you damn sight better understand our daily struggles if you want to win our votes by appealing to our trust in you. FDR, JFK, and even Reagan got that. The shame is that when Republicans (since Ike) have won in that manner, they simply and mostly did the opposite once in office, and only a few Republican non-elite voters have learned that lesson.

      "Lone catch of the moon, the roots of the sigh of an idea there will be the outcome may be why?"--from a spam diary entitled "The Vast World."

      by bryduck on Tue Oct 02, 2012 at 09:37:23 AM PDT

      [ Parent ]

  •  In other words... (1+ / 0-)
    Recommended by:

    ...they want us to vote for Bertie Wooster's evil twin.


    by Lupin on Tue Oct 02, 2012 at 09:12:20 AM PDT

  •  There is another reason people hide money (3+ / 0-)
    Recommended by:
    phonegery, skyounkin, bontemps2012

    in places like the Caymen Islands. They are involved in criminal activities. If Romney is not sending his money offshore to avoid taxes, he must be involved in criminal activites.

    When you don't vote, Mitt happens.

    by shoeless on Tue Oct 02, 2012 at 09:13:54 AM PDT

  •  Tax Advisors Code of Silence? (2+ / 0-)
    Recommended by:
    phonegery, antirove

    It seems to me that one of the ways the rich get away with this is that tax experts who cater to people like Romney pretend that these tax avoidance schemes don't really exist. Lawrence O'Donnell had a tax expert on his show last week that claimed to have many clients who have similar kinds of investments. He dismissed out of hand the idea that there could be any tax advantage to Romney's foreign investments. He kept repeating that it didn't matter where Romney put his money because he still had the same tax liability. When questioned then why do it, he said investment opportunities.

    It is pretty obviouse to even somebody like me who knows little about our tax code. That you don't create layers of nesting and interlocking shell companies in the Caymen Islands if it isn't going to fatten your net income at the end of the day. There are very few people who understand how this works and even fewer who want to talk about it.

  •  OT re Willard's money...The Guardian reported on (5+ / 0-)

    the 29th that Willard says he would press for an indictment of Iranian president Mahmoud Ahmadinejad on charges of inciting genocide.

    I don't have words for how incompetent he is for the Oval Office.  The idea of him being in charge of anything that directly affects other humans makes my skin crawl. I have a feeling what we know about him is only the tip of the iceberg - literally; the dangers lurking beneath his opaque surface are potentially cataclysmic.

    "Evil is a lack of empathy, a total incapacity to feel with their fellow man." - Capt. Gilbert,Psychiatrist, at the end of Nuremberg trials.

    by 417els on Tue Oct 02, 2012 at 09:20:49 AM PDT

    •  Mitt thinks in lies. (1+ / 0-)
      Recommended by:

      What's wrong with that?

      •  You know. Lies are so high maintenance. (0+ / 0-)

        You have to remember them in order to cover them up or wangle out of them or perpetuate them by telling more lies.  It's very stressful and a good reason not to do it.

        There has to come a tipping point when you've told so many lies that your mind becomes a huge jumble of 'stuff'.  What then?  Create little mental rectangles in the here and now, where you say whatever you think fits at the moment?  Then toss that one in some unlit warehouse where you keep your stacks and stacks and stacks of lies?

        Willard's waking mind must be an addled MESS.

        "Evil is a lack of empathy, a total incapacity to feel with their fellow man." - Capt. Gilbert,Psychiatrist, at the end of Nuremberg trials.

        by 417els on Wed Oct 03, 2012 at 07:34:39 AM PDT

        [ Parent ]

  • ways unavailable to most taxpayers. (4+ / 0-)
    Recommended by:
    phonegery, shoeless, skyounkin, antirove

    You could apply the same statement to how Corporations and Wall Street have Preferential treatment in Congress.

    As Always, Two sets of Laws. One set for the Wealthy
    and a Completely different set for the Rest of US.

    On Giving Advice: Smart People Don't Need It and Stupid People Don't Listen

    by Brian76239 on Tue Oct 02, 2012 at 09:23:48 AM PDT

  •  Romney playing with semantics? (1+ / 0-)
    Recommended by:

    Like Will Shortz said on a recent radio appearance, focus on where the sentence sounds funny, in this case, there are several bits that sound funny...

    "not one dollar of reduction in taxes"

    ...That is a carefully parsed sentence.

    Could it be that he's gotten more than one dollar, technically that is not one dollar? I guess it comes down to what you mean by "not"

    Could it be that he has received no tax reductions from the Cayman Islands on the money domiciled in the Cayman Islands? Technically there would be no tax reduction. I guess it comes down to what you mean by "reduction"

    (-9,-9) pragmatic incrementalist :-P

    by Enterik on Tue Oct 02, 2012 at 09:32:55 AM PDT

  •  Oh it's obvious he's not avoiding taxes. When you (1+ / 0-)
    Recommended by:

    set up a slew of corporations and businesses on an island consisting of nothing but mailboxes, think of all the overhead you avoid.  No staff, no don't even need toidy paper or rubber bands.

    When you nest businesses within businesses, like those lacquered Russian dolls, you can get by with fewer mailbox rentals, too.

    Maybe we can all pitch in to buy a Kos Yacht and drive it there to go get us some.

    "Evil is a lack of empathy, a total incapacity to feel with their fellow man." - Capt. Gilbert,Psychiatrist, at the end of Nuremberg trials.

    by 417els on Tue Oct 02, 2012 at 09:45:50 AM PDT

  •  Well duh. (1+ / 0-)
    Recommended by:

    "The rich are different than you or I" or something.

    I know you believe you understood what you think I said, but I'm not sure you realize that what you heard is not what I meant. -- S.I. Hayakawa

    by tapu dali on Tue Oct 02, 2012 at 09:57:39 AM PDT

  •  Until these strategies are ruled illegal (1+ / 0-)
    Recommended by:

    .....I really can't fault him for employing them.

    Would anybody pay 35% tax when they could legally pay 15%?

    When I do a tax return for a guy making $60,000, I look everywhere I can to save that person a few hundred bucks.

    It's no different for Romney, there's just a few more digits involved.

    However, I do hold him totally accountable on a moral level for purposely blowing up companies, vulturing the profits and offshoring jobs.

    If he were a different kind of guy, somebody who really did give a shit about the "47%", I don't think this tax stuff would be a big issue.

    I'm all for holding his feet to the fire in terms of disclosure of tax returns, but if anybody really thinks that one of these articles is going to provide the "aha" moment for his taxes, they are completely delusional.

    Trying to piece this stuff together with just a few tax returns is like doing a jigsaw puzzle with 2/3 of the pieces missing. It's a fools errand.

    "Pay no attention to that man behind the curtain!"

    by jkay on Tue Oct 02, 2012 at 09:59:36 AM PDT

    •  Apply "scofflaw" ??? (0+ / 0-)

      There is no reason whatsoever to believe these overseas accounts are being used for anything by laundering domestic money, so's it will be taxed as offshore money or at retirement account rates.


      Hard to get evidence.

      •  Your statement.. (1+ / 0-)
        Recommended by:

        ...does not make sense.

        the phrase "it will be taxed as offshore money" is totally meaningless.

        First of all, unless you are able to employ some type of "blocker corporation strategy", or some other exotic type of shelter,  any earnings in an "offshore" account is totally taxable by the United States.

        The fact that they are offshore does not make them non taxable.

        And there is no such thing as "retirement account rates".

        Any distributions from a retirement account would be taxed at regular marginal rates.

        "Pay no attention to that man behind the curtain!"

        by jkay on Tue Oct 02, 2012 at 11:58:45 AM PDT

        [ Parent ]

        •  "Retirement account rates" (0+ / 0-)

          are zero now and whatever applies later when the money is taken out.

          You knew that.

          Also that money earned offshore and not returned onshore is taxed differently from money earned onshore.

          This is a money masquerade.

          •  I give up (0+ / 0-)

            Trying to bring facts to the discussion on taxes in here is not much different than trying to get Redstaters to believe in evolution.

            Believe what you want to believe.

            I'm not defending the tax code, a lot of it is idiotic and stacked for the Romney's of the world. But as long as it is what it is, guys like him are entitled to take advantage of it.

            It's just like any other law.

            "Pay no attention to that man behind the curtain!"

            by jkay on Tue Oct 02, 2012 at 12:50:17 PM PDT

            [ Parent ]

  •  if there was no profit (0+ / 0-)

    in storing his money offshore...he wouldn't.  

    As for the corporate scofflaws...well, it doesn't matter anymore than Mitt's own flight from taxation as there is no will in Congress (on the Dem side) to actually reform Wall St or the Tax Code in a sane manner.

    Mitt might cost himself the election because of his well deserved rep as a 1%er who doesn't give a fuck about the 99%...but that won't stop politicians from both parties lining up to listen to the 1% lobbyists who will "help craft future legislation" (out of the goodness of their hearts).

    But I, being poor, have only my dreams; I have laid my dreams under your feet; tread softly, because you tread on my dreams. – Yeats

    by Bill O Rights on Tue Oct 02, 2012 at 10:48:26 AM PDT

  •  The Elite 1%-ers like Romney are entitled to (0+ / 0-)

    saving millions on their taxes over the years. Because they are wealthy they deserve a break. It's not easy being so wealthy you know.

    You just don't get it. Try to set the proper tone, Laura.

    "extreme concentration of income is incompatible with real democracy.... the truth is that the whole nature of our society is at stake." Paul Krugman

    by Gorette on Tue Oct 02, 2012 at 11:26:48 AM PDT

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