It’s an established fact that a lot of Mitt Romney’s vast wealth is parked in offshore tax havens. Mr. Romney has claimed he didn’t avoid any taxes by using offshore accounts more than once. That claim doesn’t even make sense on its face. I mean, why bother to spend the money on an army of accountants to set up these complicated banking arrangements outside of our country if there was no benefit to him? Wouldn’t it be more patriotic to keep all his money in America? Especially since he’s been running for President for the last six years.
Of course, the truth is Mitt Romney has benefited from using tax havens, in more ways than one:
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.[...]
Some of the offshore entities enabled Bain-owned companies to sidestep certain taxes, increasing returns for Mr. Romney and other investors. Others helped Bain attract foreign investors and nonprofit institutions by insulating them from taxes, again augmenting Mr. Romney’s bottom line, since he shared in management fees based on the size of each Bain fund.
The documents — which include confidential Bain prospectuses and foreign regulatory filings, many previously unreported — illustrate how 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.
Mitt Romney’s entire business model is based on maximizing profits in part by minimizing tax contributions for himself and his investors. He can make all the implausible claims he likes, but the fact remains the mystery behind Mitt Romney’s financial status will never be resolved until he releases at least another five to ten years of his past tax returns.
Of course, Mr. Romney has adamantly refused to release any more information, leaving open the question of what exactly he is hiding. Could it be that the returns would reveal Mr. Romney’s claims about his tax rates are lies? Or another theory suggests Mr. Romney is really a billionaire and has vastly understated his true wealth. Since he refuses to come clean, I suppose we’ll never know.