I happen to have some experience in AML or anti-money laundering initiatives in various banks and when I read some of the comments on why have an account in Caymans (or any other off-shore) it sounds as if a regular guy would ask why a robber needs a mask.
The issue is – it always was – not the source of funds but ability of the tax enforcing entity in any given country to trace and link an account to someone who is not disclosing it.
Typical example is to have large international diversified operations where a portion – and really, you need a portion of, not all of the revenue – goes to untraceable accounts where one more chain in funds hopping hides the ultimate benefactor.
So, it’s not really about Cayman banks low-cost operations or their ability to identify where the funds are sourced from (as that’s all AML is) but rather their proxy-role to prevent direct identification of the ultimate user of the account. There is no other benefit than that and everyone who ever looked at their tax return and noticed how much money (regardless how low tax rate is) goes to Government probably had a thought “Geez, if I could spare 30% of this, I’d be much richer”. As we all know, there are people like that but I doubt they post here.
My ongoing assumption had always been that Romney didn’t want to disclose his past tax information because it would reveal that he had not been tithing to the Morman Church as required by that group. That wouldn’t be illegal, but it wouldn’t look good either.
But this business with his supposed very large IRA balance is scary. I’ve read several figures. $105 million, $102 million and $35 million. Given the variance, I’m not sure any of them are true, but if one of them is, it is very hard to believe that a $30,000/year contribution over 10 years could lead to any of those balances without some very very special circumstances. How were his contributions valued and how did he garner 10X greater than Bernie Madeoff rates of return?
Do you feel that this article lacks objectivity? In my view, unless one can show incorrect statements from someone, it’s hard to show “non-objectivity”. Has Krugman made any such statements here?
Ignoring “others”, since I don’t know whom you’re talking about, where in the article does Krugman imply that Romney has done something criminal? The only thing that comes close is the IRA mentioned, and Krugman acknowledges that it could have been built up legitimately.
Krugman makes no claim that Romney didn’t earn his money. Not that you said Krugman made this claim, but it’s further evidence that Krugman doesn’t think Romey is a thief. But I agree that there are much more important issues to discuss regarding Romney.
One huge strawman. In a nutshell, Krugman doesn’t accuse Romney of anything criminal, and doesn’t say he’s a jerk for protecting his assets. He just thinks voters have a right to know about his finances. Yes, that might entail releasing “seriously damaging” information, and I would argue, due to more than one reference to “voters”, that Krugman means it would harm his re-election chances, and nothing more.
The only problem with pinning this one on Cayman is that Professor Jason Sharman demonstrated in a recent study that Cayman was one of only two countries with 100% compliance in collecting proper identity documents for the beneficial owners of shell companies. (Here’s a hint… the USA wasn’t the other country with a sparkling record.)
Again, it’s not about compliance or anything; it’s just the fact that it is a different jurisdiction that does not have any type of direct tax and their regulatory framework was, up to recently, non-existent.
So, aside from having a secluded private account that due to regulatory framework differences a private person in US may choose to ignore for IRS purposes but will draw from it when it’s time to get that new yacht, the flood of hedge fund companies registration is due to zero direct taxes. Which meant hedge fund bets on some US or Euro-zone economic activity that can get very profitable gets landed at the tax haven. Add to that zero cost of transactions; i.e. moving funds from various groups within a conglomerate to balance an overall tax load and you get a pure and unobstructed Das Capital game thus generating extra profit that other companies operating in a regulated environment have to forego.
When regulators and/or tax agencies noticed this they pushed on to close the loop by issuing tax amendments saying that it no longer matters where the company is registered but where does it conduct its primary business.
And, Cayman Island was specifically targeted and they did some efforts to “comply” but they have way to go.
Romney lies and delays and refuses to reveal because he knows that the truth would make him look to voters like an amoral grotesquely rich unfeeling global capitalist cheerfully laying off US workers and destroying US businesses.
Doesn’t really matter whether his actions were legal, my guess is that they were.
For example, the Boston Globe broke the story this morning that Romney flat out lied about when he left Bain, apparently because he didn’t want to be associated with the corporate raiding that he was indeed responsible for.
A story the Romney campaign, of course, denies, without (as far as I could tell from the secondhand report I saw on a blog) addressing why their documentation is wrong.
Though as an aside, I saw it pointed out (claimed?) that most of Staples’ new jobs (which Romney has touted as being his) date to after '99, so even if he is telling the truth on this, he was still trying to have it both ways.
The article also says that while still being the “sole stockholder, chairman of the board, chief executive officer, and president” of Bain, that “[s]ince February 11, 1999, Mr. Romney has not had any active role with any Bain Capital entity and has not been involved in the operations of any Bain Capital entity in any way’’. While seeming a bit strange, I don’t think the idea of Romney ceding control of Bain while he was directing the Olympics is beyond the realm of possibility. If Romney hasn’t denied being the CEO, or it can be shown that he did indeed direct operations after 1999, I don’t see this as being particularly noteworthy.
You should Google the “double Irish”. There are advantages for a US resident to have off-shore accounts when they also have off-shore investments and off-shore income.
So, lets say that Romney has $10 million invested in an Iranian oil company (or maybe has a 15% stake in such a company). You don’t think that would influence US foreign policy if he were to become POTUS?
He could hold a birth certificate issued by Pluto for all I care and I don’t think that would have nearly as much influence on his policy decisions.
That is the difference between a birth certificate and his financial statements.
When I lived overseas and earned money overseas, I filed a 1 page tax return and paid $0.00 taxes (federal or state) for the entire 5 years that I was out of the country. Also, I didn’t have to pay US taxes on any money that was taxed by a different country. Maybe taxes have changed since then?
I think at his level of wealth not releasing them is a good reason for others not to vote for him. Should it be required by law? I don’t know. But ethics are not the same as law.