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Home Page > Blogs > Entertainment blogs > Manhattan Diary > Mitt Romney, poster boy for tax havens - Cayman Island accounts part of the $100 billion lost revenue to US every year

Manhattan Diary by Cahir O'Doherty

Mitt Romney, poster boy for tax havens - Cayman Island accounts part of the $100 billion lost revenue to US every year

Posted on Monday, September 24, 2012 at 08:33 AM

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GOP presidential candidate Mitt Romney (Photo: ABC)

Offshore tax havens cost the US $100 billion in lost revenue every year.

We already know Mitt Romney has multiple investments in the Cayman Islands, which critics have claimed shield a portion of his finances from the US Treasury.

On Friday Rachel Maddow put it memorably: 'Maybe the money just likes the nice view…'

The Romney campaign say he isn't avoiding taxes, because 'the investments by the blind trusts in funds established in the Cayman Islands or other jurisdictions are taxed in the very same way they would be if the shares were held in the US…'

Perhaps, but the taxes you dodge by parking your stash in the Caymans aren't personal income taxes, they're your offshore investment funds’ corporate taxes.

So the Romney's aren't evading income taxes by placing money in the Caymans - rather the funds they deposit their money into evade taxes by being situated in the Cayman Islands.

It would be funny, I suppose, if last week the nation had not watched him tell a room full of his fellow multimillionaires that almost half the citizens of the United States are dependents and deadbeats for failing to pay their full share of taxes!

That video revealed Romney as the kind of man who loudly scolds others for actions he apparently practices himself.

Democrats have hammered him for his inconsistencies and contradictions on the subject, but Republicans dismiss them all and insist they don't matter.

If they don't matter though, why are there everywhere in the news?

On Friday the Romney campaign revealed he paid $1.9 million in taxes on $13.7 million of income in 2011, which is a 14.1 percent rate. Since most of his income comes from his investments it's taxed at a top rate of 15 percent, rather than the top rate of 35 percent for wages. Remember that 13 or 14 percent tax rates are tax levels that most ordinary working stiffs can only dream of.

You may also be interested to know that corporate taxes have dropped from 32 percent in 1952 to less than just 9 percent today. But payroll taxes have risen from 10 percent of federal revenue in 1952 to 40 percent now. It’s the best of times, it’s the worst of times.

For American billionaires there’s no doubt it’s the best of all possible worlds and the outlook keeps brightening, but Romney wants to comfort the already supremely comfortable with an even bigger tax cut bonanza whilst telling the 47% they'll have to cut back soon.

Democrats aren't proposing massive tax cuts for the rich, to be paid for by closing unspecified loopholes and deductions - so one can only wonder will the deductions Romney's proposes to close be ones that middle class families rely on? We don't know yet, he hasn't said.

As he often does, Bill Clinton summed it up best on Face the Nation: 'I don’t think we can get out of this hole we're in if people at that income level only pay 13, 14 percent.'

Clinton isn't kidding. Offshore tax havens cost the US $100 billion in lost revenue every year, $1 trillion over the last decade. In 2010 making up for this lost revenue cost the average U.S. tax filer $434.

In 2009 President Obama launched a major initiative against overseas tax havens with new tax laws, new reporting requirements and an ongoing investigation by 800 new IRS agents. Obama sees it as a problem.

Want to bet that'll continue under Romney?

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39 comments

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Maggie47 | Sep 25, 2012, 12:23 PM EDT

Cahir, I don't see anything in your article about Mr. Romney's charity Kathleen, The Obama admin. lied to us tried to blame it on some movie. Does he really think the american people are that stupid?

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KathleenBerrio | Sep 25, 2012, 10:53 AM EDT

BrianO Romney's 13.5 % donations go to the Mormon Church, by his admission. Is that a donation or a tithe ? Romney was first to criticize Obama for the attack on the Libyan consulate even before he had all the information about it.

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BrianO | Sep 25, 2012, 10:21 AM EDT

It is time for you to question obama, fast and furious resulted in civilian deaths, the embassy assassinations have been the basis of a watergate type coverup, there comes a time where even far leftist must rethink their blind allegiance.

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BrianO | Sep 25, 2012, 10:16 AM EDT

I know the pro obama forces hate all that is of free markets and wealth creating, these people make the money that is taxed to pay for your government based programs, the percentages are based on the law. Romney may represent everything you dislike, He is from an entrepreneurial family, he donated his inheritance to charity, he used his skills and resources to become a multi millionaire, he is married to the same woman, he has a good family, over the last 20 years Romney has averaged 13.5% of his income to charity, yes he believes in charity and follows his beliefs you know putting your money where your mouth is. The problem the Obama ites have is that can't control those donations.

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McNamara31 | Sep 25, 2012, 09:31 AM EDT

mairint Again you smear the President with your statements, when you know all too well that in his speech at Notre Dame he stated:"let's work together to reduce the number of women seeking abortions by reducing unintended pregnancies, and making adoption more available, and providing care and support for women who do carry their child to term" And further, Roe vs Wade was passed by a majority Republican appointed Supreme Court during the Nixon presidency.And as for Romney, if a venture capitalist who made a majority of his money at the cost of middle class worker jobs (and who was strongly for abortion before he wasn't for abortion) I'd question my reasoning.

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eiriamach | Sep 25, 2012, 07:05 AM EDT

About two thirds of the comments below are intolerant, insulting, or complaining. What's "Irish" about insults, complaints, and intolerance? It's an Irish tradition to acquire some facility with facts and debate, but all I see in the complainers here is fact-free, mean-spirited growling. They seem so desperate!

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hollabackgurl | Sep 24, 2012, 11:08 PM EDT

Mitt Romney is the rocket man from the Planet Kolub. He's Satan's brother and Jesus's brother too. He's a man on his way to becoming a God. He believes in lying for the Lord. And that black welfare moms are cured by God. See, Marint, anyone can demagogue.

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The Commentator | Sep 24, 2012, 10:44 PM EDT

The Republicans are out to benefit themselves. Perhaps many of them who are not already wealthy are hoping for tips from Romney on how to avoid taxes and invest offshore. Hopefully Obama will somehow prevail and the Democrats gain control of the house and senate and pass meaningful tax laws to ensure the working class who now pay much higher rates than the rich, have their taxes lowered and the rich have the loopholes eliminated so they pay more than the poor and middle class. It's pretty strange that Romney's reported income dropped from almost 22 million dollars in 2010 to 13.7 in 2011. How could someone so fiscally irresponsible be qualified to be president? One would think that a money master like him would have been able to maintain his income. Oh, wait a minute, he must be deferring or manipulating his money so he doesn't have to pay taxes like the honest working class of Americans. Don't worry about him, I'm sure he will find a way to pay much less taxes if he becomes president. Maybe he will become a Latino for 2016 if he doesn't win the election this year.

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jbradley12 | Sep 24, 2012, 07:51 PM EDT

In 1900, Mark Twain said; "There are two kinds of Republicans --- millionaires and fools." The millionaires of 1900 are the billionaires of today. I'll tell you one thin and thats not two things --- Mark Twain knew what he was talking about.

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seanomelb | Sep 24, 2012, 06:40 PM EDT

The teabaggers below fail to justify Romney's tax havens so they turn on Obama with their nonsensical slurs.

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Pittsburghkid | Sep 24, 2012, 06:10 PM EDT

Romney gave 4 million dollars to charity, which is better then giving money to the government.

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hollabackgurl | Sep 24, 2012, 04:10 PM EDT

mikehoulihan calls Obama the abortion president and then expects his opinions to be taken seriously. The rest seem to only want to silence and insult the people they disagree with rather than learn something. They're perfect examples of the Teabag mentality.

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jflanagan | Sep 24, 2012, 03:14 PM EDT

It's a good thing these guys only write for a living. If we had to rely on them to run a business and create jobs, the out of control unemployment rate would be at 30% most likely.

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borefield | Sep 24, 2012, 01:10 PM EDT

Mickey74007 you are so right. I am really thinking of taking I C off my emails as the left wing spewing is getting really annoying. There are so many good Irish based newsletters out there with wonderful cultural and historic news. IC has second rate story tellers, I can't call them journalists because most 7th. Graders would do as good or better

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hollabackgurl | Sep 24, 2012, 12:59 PM EDT

Imagine the 'un-American' howls of protest from the right if President Obama had parked a cent of his money in the Cayman Islands? They need to be consistent.

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