Do You Own a Secret Corporation in Bermuda?

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Even More Reasons Why We Need to See Mitt Romney’s Tax Returns

Way back in October, we began calling for Mitt Romney to release his tax returns — mostly to see how Romney’s proposed tax policies would impact his own situation relative to that of middle class Americans. We also wanted to know if Romney was taking advantage of special tax loopholes that allow millionaires to pay a lower tax rate than millions of middle class workers. Finally, voters deserve to know just how Romney amassed a quarter-billion fortune and where exactly his millions in annual income comes from.

Well, Romney refused for months to release any tax returns. Then, after immense pressure from both Democrats and his Republican primary rivals, he eventually released just two years of returns — far from the 12 years released by his own father when he ran for president and well short of the 23 years Romney provided to Sen. John McCain (R-AZ) in 2008 when he hoped to get picked as McCain’s running mate.

When we saw those returns, we learned that Romney does take advantage of a tax code that is rigged for the privileged few to pay a lower tax rate than millions of middle class workers. We also learned of, among many other things, a previously secret Swiss bank account used to bet against the American dollar and other holdings in notorious tax havens like Luxembourg, the Cayman Islands, and Bermuda.

Now, a blockbuster piece of reporting out this week from Vanity Fair has raised even more questions about Romney’s finances and whether he is using tricks, accounting gimmicks, overseas accounts, foreign shell corporations, and other unfair loopholes to avoid paying his fair share in taxes.

The Top FIVE Shady Romney Financial Tactics Exposed This Week

Everyone should read the story linked above, but here’s a quick summary from ThinkProgress’s Pat Garofalo and Annie-Rose Strasser:

1. Romney owns a corporation in Bermuda. Filings describe Sankaty High Yield Asset Investors Ltd. as a “a Bermuda corporation wholly owned by W. Mitt Romney.” The corporation was established by Romney in 1997, but was transferred into a blind trust under Ann Romney’s name the day before Mitt began his tenure as governor of Massachusetts. Bermuda is a famed tax shelter.

2. Romney uses special, tax-free stocks to inflate his retirement account. Romney’s independent retirement account set up during his time at Bain Capital could contain as much as $102 million — a staggering amount given limits on employee contributions. The Vanity Fair piece parses how Romney inflated his IRA so much: When Bain bought and sold companies, it gave employees select, high-risk, high-revenue shares of the business. These shares went straight into Romney’s IRA, so they were untaxed profits. And since they started off low, the shares were seen as being below contribution limits — despite the fact that they promptly grew into a large fortune.

3. Romney’s blind trusts are not-so-blind. Ann and Mitt Romney keep their investments in a “blind trust,” which means that they avoid making investment decisions that may impact their political work. But the Romney’s blind trust, which is run by their personal lawyer, includes investments in a company owned by their own son.

4. Romney uses a so-called “blocker corporation” to avoid taxes on his IRA.Though Romney says his investments in the Cayman Islands do not help him lower his tax bill, Romney’s IRA appears to have invested in an offshore corporation which then invests in U.S. businesses, to avoid paying the the U.S.’s Unrelated Business Income Tax.

5. Bain Capital helped financial fraudsters dodge taxes. Bain received investments from “the newspaper tycoon, tax evader, and fraudster Robert Maxwell” (who has since died), as well as other financial oligarchs, which helps provide them “with additional ways to skip around tax, disclosure, and regulatory requirements that they might trigger if they invested directly.”

IN ONE SENTENCE: If Mitt Romney doesn’t have anything (else) to hide, then there’s no reason we can’t see the rest of his tax returns — now.

Evening Brief: Important Stories That You May Have Missed

A step-by-step guide to deciphering Mitt Romney’s position* on whether or not the Obamcare mandate is tax.

The Romney campaign is now taking heavy incoming — from fellow Republicans.

Can Democrats catch up in the Super PAC game?

An even deeper look at the previously secret Bermuda corporation the Romneys own.

GOP Rep. tells constituent who asks about raising the minimum wage to “get a job.” (He already has one.)

The GOP’s voter suppression law in Pennsylvania could disenfranchise more than 750,000 people.

Rush Limbaugh said “it all went down hill” when women got the right to vote.

The June heat wave broke 3,215 records.

Americans don’t like what they hear about Mitt Romney’s record.

*Subject to change.

 

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Authors

Advocacy Team