Election 2012

Another Financial Skeleton in Romney’s Closet

According to a new report from ABC News, Mitt Romney's admission that he is paying an effective tax rate of 15 percent or less is only half the story. The other half is the off-shoring of significant portions of Romney's wealth in tax havens, and analysis of securities filing reveals at least some of what's being hidden.

[...] tax experts tell ABC News there are other reasons Romney may not want the public viewing his returns. As one of the wealthiest candidates to run for president in recent times, Romney has used a variety of techniques to help minimize the taxes on his estimated $250 million fortune. In addition to paying the lower tax rate on his investment income, Romney has as much as $8 million invested in at least 12 funds listed on a Cayman Islands registry. Another investment, which Romney reports as being worth between $5 million and $25 million, shows up on securities records as having been domiciled in the Caymans.

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. [...]

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.

Mitt Romney's financial dealings may be shady and morally deplorable, but it's unlikely any of it is explicitly illegal. Unlike the average American, Romney and others with vast wealth can afford to hire experts in the field of tax-dodging that will reduce your liability to the lowest possible level while still remaining within legal limits.

With that said, Romney's financial trainwreck, from Bain's vulture capitalism to the off-shoring of wealth, will seriously hamper his efforts to present himself as the right man to fix the economy. Because aside from representing everything that is wrong with the structure of our economy, everyone reading this has also probably had a boss at some point in their life who looked just like him.