Romney Parks Millions in Cayman Islands

[SandEagle]

http://abcnews.go.com/Blotter/romne...hore-tax-haven/story?id=15378566#.TxiTIfnZFf_

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.

sooo, he's putting money aside in the islands to attract foreign investors who are going to invest in the US anyway, but without paying US taxes. yeah, money laundering at its finest. this man is not fit to be president of our country.

 

[Dulanic]

Pending the incoming "He is following the law" comments from the right...

 

[Theb]

This makes his sputtering about releasing his tax returns a little more interesting.

 

[Fern]

http://abcnews.go.com/Blotter/romne...hore-tax-haven/story?id=15378566#.TxiTIfnZFf_




sooo, he's putting money aside in the islands to attract foreign investors who are going to invest in the US anyway, but without paying US taxes. yeah, money laundering at its finest. this man is not fit to be president of our country.

Wow.

Pretty desperate, and there's a lot of misinformation there.

For one thing, foreign people (NRA's) are typically not taxed on their investment income in the USA. That's been our policy for a long time. We WANT their capital invested here.

Also, US individuals like Romney must still pay the same, or in some cases higher, taxes on their (foreign) investment income.

When I was working in Miami FL doing international tax, we had similar situations - foreigners' money routed through a place like the Cayman Isle - not to avoid/evade US taxation, but instead to conceal their investment here from the foreign authorities. In some Central and S.A countries they are not allowed to invest outside of their own country. The penalty for doing so is confiscation of wealth, imprisonment etc. So, you route it through the islands to avoid a situation where the IRS might send a computer generated letter tipping off the foreign govt.

A lot of people in these countries (think Venezuela or someplace with high inflation) believe their money is safer outside their country and instead placed in the USA.

Fern

 

[Jaskalas]

Romney Parks Millions in Cayman Islands

Some folks are convinced that the rich empty suit won't get him very far in the general election when Obama rips into things like this.
http://abcnews.go.com/Blotter/romne...hore-tax-haven/story?id=15378566#.TxiTIfnZFf_

 

[JS80]

http://abcnews.go.com/Blotter/romne...hore-tax-haven/story?id=15378566#.TxiTIfnZFf_




sooo, he's putting money aside in the islands to attract foreign investors who are going to invest in the US anyway, but without paying US taxes. yeah, money laundering at its finest. this man is not fit to be president of our country.

lolidiot

Stick to anti-Semitism. At least that's subjective.

 

[Jhhnn]

Wow.

Pretty desperate, and there's a lot of misinformation there.

For one thing, foreign people (NRA's) are typically not taxed on their investment income in the USA. That's been our policy for a long time. We WANT their capital invested here.

Also, US individuals like Romney must still pay the same, or in some cases higher, taxes on their (foreign) investment income.

When I was working in Miami FL doing international tax, we had similar situations - foreigners' money routed through a place like the Cayman Isle - not to avoid/evade US taxation, but instead to conceal their investment here from the foreign authorities. In some Central and S.A countries they are not allowed to invest outside of their own country. The penalty for doing so is confiscation of wealth, imprisonment etc. So, you route it through the islands to avoid a situation where the IRS might send a computer generated letter tipping off the foreign govt.

A lot of people in these countries (think Venezuela or someplace with high inflation) believe their money is safer outside their country and instead placed in the USA.

Fern

So what you're saying is that the Cayman accounts launder/ conceal money for Mitt's investors, right?

A guy like Romney wouldn't even realize that was happening, would he?

And there's obviously nothing shady about using laundered foreign money to enrich yourself while looting American companies, is there?

I'm not sure it would be fair to say that with any certainty, but your own remarks lend themselves to such conclusions...

 

[lopri]

Americans don't hate/envy the rich. Has anyone heard a serious argument that Bill Gates should give up half of his money for charity? Being rich is not a sin: If anything we admire those who are hardworking and successful and have deservedly earned their wealth.

It's a different story when politicians, churches, unions, lobbies, or otherwise "well-connected" are gaming the system in such ways normal folks are not or are not aware/capable/willing.

 

[bfdd]

Romney is scum. I do not hate the rich, but I do not like trash like Romney.

 

[nageov3t]

This makes his sputtering about releasing his tax returns a little more interesting.

what sputtering?

for the past 30 years, every single presidential candidate (except now Newt Gingrich) has waited until April to release their tax returns.

 

[The-Noid]

It attracts foreign capital that doesn't have to pay tax because of an advantageous source/residence jurisdiction tax code. The US is among the most punitive for foreign tax so Romney is more or less at a disadvantage doing this. He would pay his residence rate but the source rate is 0, exactly the same. Other countries citizens love the caymans in that they pay the source rate of 0 and no residence rate. That is the attraction for foreigners.

The attraction for us citizens and the way it is always sold to high net worth is that your assets are outside the US, so in case of a lawsuit or such the accuser can't get them. Generally the assets will be in irrevocable trust or a limited partnership and be free from creditors, legal judgements and if the sovereign collapses. Tax wise Romney is the same, however the assets are sheltered.

 

[cybrsage]

It attracts foreign capital that doesn't pay tax under a source/residence jurisdiction tax code. The US is among the most punitive for foreign tax so Romney is more or less at a disadvantage doing this. He would pay his residence rate but the source rate is 0. Other countries citizens love the caymans in that they pay the source rate of 0 and no residence rate. That is the attraction for foreigners.

The attraction for us citizens and the way it is always sold to high net worth is that your assets are outside the US, so in case of a lawsuit or such the accuser can't get them. Generally the assets will be in irrevocable trust or a limited partnership and be free from creditors, legal judgements and if the sovereign collapses. Tax wise Romney is the same, however the assets are sheltered.

You take all the fun out of blasting Romney. Go away.

 

[Jhhnn]

It attracts foreign capital that doesn't pay tax under a source/residence jurisdiction tax code. The US is among the most punitive for foreign tax so Romney is more or less at a disadvantage doing this. He would pay his residence rate but the source rate is 0. Other countries citizens love the caymans in that they pay the source rate of 0 and no residence rate. That is the attraction for foreigners.

The attraction for us citizens and the way it is always sold to high net worth is that your assets are outside the US, so in case of a lawsuit or such the accuser can't get them. Generally the assets will be in irrevocable trust or a limited partnership and be free from creditors, legal judgements and if the sovereign collapses. Tax wise Romney is the same, however the assets are sheltered.

Romney is only at a disadvantage wrt foreign investors.

The other aspect of foreign business entities is that Uncle Sam can't audit them- so income can be disbursed to principals in a variety of ways that aren't necessarily reflected in the tax returns of American principals. And so long as that money stays offshore in various business accounts under banking secrecy statutes, Uncle will never know. It's still their money, under their control.

If my Cayman Investment LLC pays a Bahamanian corporation for services on my wholly owned subsidiary in the Netherland Antilles who in turn does business with a Panamanian bearer corporation that I secretly own, it's all counted as expenses until it lands in Panama, and it's still my money... and nobody but me can prove that I own that Panamanian corporation, where I pay zero taxes. The money is moved around by the giants of the international banking community for a small fee...

 

[The-Noid]

Romney is only at a disadvantage wrt foreign investors.

The other aspect of foreign business entities is that Uncle Sam can't audit them- so income can be disbursed to principals in a variety of ways that aren't necessarily reflected in the tax returns of American principals. And so long as that money stays offshore in various business accounts under banking secrecy statutes, Uncle will never know. It's still their money, under their control.

If my Cayman Investment LLC pays a Bahamanian corporation for services on my wholly owned subsidiary in the Netherland Antilles who in turn does business with a Panamanian bearer corporation that I secretly own, it's all counted as expenses until it lands in Panama, and it's still my money... and nobody but me can prove that I own that Panamanian corporation, where I pay zero taxes. The money is moved around by the giants of the international banking community for a small fee...

I think you are confused about what is earned income and what is investment income. You may want to read a book because your definition is from the mid 80's or so.

Look at the Swiss settlements and also Allen Stanford for examples.

 

[Jhhnn]

I think you are confused about what is earned income and what is investment income. You may want to read a book because your definition is from the mid 80's or so.

Look at the Swiss settlements and also Allen Stanford for examples.

You're obviously attempting to obfuscate, since I never mentioned earned income, at all.

Allen Stanford apparently engaged in fraud against American investors, which was his downfall, not his methods of moving & hiding money, at all. The front organizations of operations as described often own a variety of entirely legitimate enterprises, judiciously avoiding fraud at that level, at least in terms of acceptable business practice in that country. What they get to count as expenses is another matter entirely, which is where the money disappears & becomes untraceable. It's about tax fraud, not investment fraud.

 

[The-Noid]

You're obviously attempting to obfuscate, since I never mentioned earned income, at all.

Allen Stanford apparently engaged in fraud against American investors, which was his downfall, not his methods of moving & hiding money, at all. The front organizations of operations as described often own a variety of entirely legitimate enterprises, judiciously avoiding fraud at that level, at least in terms of acceptable business practice in that country. What they get to count as expenses is another matter entirely, which is where the money disappears & becomes untraceable. It's about tax fraud, not investment fraud.

The method that you discussed about sheltering incomes through corporations is based on earned income. Double Dutch sandwich, etc. Investment income has different characteristics on what the IRS can go after. Stanfords customers also all paid tax even though he was basically running a ponzi or has been alleged. if you have investment accounts outside the US at this point the IRS can not only get the money that is not reported, but also fine the host country. Look at Switzerland and the banks of the host country.

Having money outside the country is for ease of regulation, ease of investment regulation and protection.

You don't really understand what you are saying...

Also don't in anyway take this as me thinking Romney is a good candidate, this is just me attempting to clarify that if this is the reason people don't vote for him, we have some pretty uneducated Americans. IMO all the republican candidates are weak...

 

[Bateluer]

Common tactic among the left, hold your opponents to their own standards. Its incredibly effective.

Wonder how many millions of dollars our politicians are holding in off shore accounts, would it break the billion mark?

 

[airdata]

And.. Bam.. he's a criminal.

So... seeing as Gingrich is also a criminal are you guys going to back Santorum now?

Common tactic among the left, hold your opponents to their own standards. Its incredibly effective.

Wonder how many millions of dollars our politicians are holding in off shore accounts, would it break the billion mark?

Any who do should be held accountable. What are they, drug king pins? No government official should be keeping their money in such a place unless they have something to hide.

 

[Thump553]

I agree with Fern that the argument that Romney parks his money overseas in this secretive trust "in order to attract foreign investors" makes no sense, but I don't view that as an error in reporting. The reporter was merely restating the rationale given by the Romney camp for such a financial arrangement.

This has the potential to be an absolutely huge issue, and rightfully so. It's time a bright spotlight was shown on our income tax system and how it favors the ultra-wealthy. Romney could very well be a poster child for everything that is wrong with the US tax system. Most likely he will (wrongfully) label any such attacks as anti-capitalist and anti-free enterprise.

 

[csteggo]

Does it really matter if this is legal or not? This looks bad to the Ordinary Joe (not Joe the Plummer). It looks like another case of the rich finding ways to game the system. Its about perception. Unfortunately for Romney there isn't a way around this. If he releases his tax returns everyone will find out he is paying less a tax percentage then the majority of people out there. If he does not, he is hiding it. Its Lose/Lose for him especially when he is talking about giving himself tax cuts. The funny thing about this is: Democrats have yet had to go after the republican field they are shooting themselves in the foot. Obama is just grabbing the popcorn and enjoying the show.

 

[The-Noid]

Does it really matter if this is legal or not? This looks bad to the Ordinary Joe (not Joe the Plummer). It looks like another case of the rich finding ways to game the system. Its about perception. Unfortunately for Romney there isn't a way around this. If he releases his tax returns everyone will find out he is paying less a tax percentage then the majority of people out there. If he does not, he is hiding it. Its Lose/Lose for him especially when he is talking about giving himself tax cuts. The funny thing about this is: Democrats have yet had to go after the republican field they are shooting themselves in the foot. Obama is just grabbing the popcorn and enjoying the show.

Don't forget the fact that he isn't paying Social Security and Medicare on dividends and probably his carried interest as well. That's not going to look great to the Ordinary Joe.

 

[The-Noid]

I agree with Fern that the argument that Romney parks his money overseas in this secretive trust "in order to attract foreign investors" makes no sense, but I don't view that as an error in reporting. The reporter was merely restating the rationale given by the Romney camp for such a financial arrangement.

This has the potential to be an absolutely huge issue, and rightfully so. It's time a bright spotlight was shown on our income tax system and how it favors the ultra-wealthy. Romney could very well be a poster child for everything that is wrong with the US tax system. Most likely he will (wrongfully) label any such attacks as anti-capitalist and anti-free enterprise.

That actually is a fairly good argument. Read my post RE: source/residence. A lot of these investors require sponsorship by a high level partner so they have skin in the game.

A lot of investors outside the US do not want their money in the US because we have an extremely punitive source/residence jurisdiction.

Thus Romney or anyone else will invest the money outside the country to draw in foreign investment.

Again, don't take this as me endorsing Romney, it is just that there is going to be an incredible amount of bad reporting and lack of knowledge on this issue. The internet is generally about making comments about things that people know absolutely nothing about but I can see this topic getting really out of hand.

 

[Thump553]

Out sourcing capital (to evade USA's laws) and out sourcing jobs-that's a great platform to run on. Not quite the logical followup to "jobs, jobs, jobs."

The argument that this practice is necessary to attract investments of money from third world despots, terrorist organizations and drug lords won't be too persuasive.

I wonder if Romney is beginning to under the same thought process Herman Cain did-this sh*t isn't worth the turmoil it is causing in my private life.

 

[HumblePie]

It attracts foreign capital that doesn't have to pay tax because of an advantageous source/residence jurisdiction tax code. The US is among the most punitive for foreign tax so Romney is more or less at a disadvantage doing this. He would pay his residence rate but the source rate is 0, exactly the same. Other countries citizens love the caymans in that they pay the source rate of 0 and no residence rate. That is the attraction for foreigners.

The attraction for us citizens and the way it is always sold to high net worth is that your assets are outside the US, so in case of a lawsuit or such the accuser can't get them. Generally the assets will be in irrevocable trust or a limited partnership and be free from creditors, legal judgements and if the sovereign collapses. Tax wise Romney is the same, however the assets are sheltered.

This is in fact correct. All you have stated is factual.

But it also fails to mention one thing. There are ways to move cash obtained in the US, before it gets taxed, over to the cayman islands where it will no longer be taxed. And later moved back if needed without ever being taxed.

The problem we have here is we don't know HOW Mitt moved his assets over to the Caymans. Was it done legally after all taxes were collected? I have no problem with people offshoring money elsewhere. I mean it is their money.

But when we now are looking at Mitt's admitted history of only a 15% tax rate for his income. Calling earned income of 370K for just showing up places as "not that much" and his other bullshit such as the fact that he now has millions in assets sitting in offshore accounts makes people think it probably is not there in the "legal" way.

Again, I have NO PROBLEM with people wanting to put their assets in accounts outside the US. So long as those assets were properly taxed before and/or after if they should have been subject to taxes.

 

[Siddhartha]

Common tactic among the left, hold your opponents to their own standards. Its incredibly effective.

Wonder how many millions of dollars our politicians are holding in off shore accounts, would it break the billion mark?

It is not "the left" who is ripping up Mr Romney on this. It is Mr Gingrich and who ever is paying for the ant-Romney ads I have been hearing on the radio.