Sunday, October 14, 2012

Unraveling The Romney/Bain Tax Story

The complicated story of how the 1%ers and their corporations evade democracy's taxes is the story of our crumbling schools and infrastructure and the flow of all the gains of our economy to a very few at the top. This tax evasion is also part of the story of our deficits and debt. The tax evasion is "legal" -- because the tax evaders pay the people who write the tax laws. And even as their tax evasion adds to our budget deficits and debt, the 1%ers are insisting we close the deficit by cutting Social Security, Medicare and "safety-net" programs!

The Story Of How They Evade Their Taxes

We now have two years of Mitt Romney's tax returns -- prepared knowing they would be made public. We also have some records of Romney's Bain Capital. Even these meager, sparse, sanitized records tell a story about what has been and still is happening to our government budgets -- our schools, our safety net, our health and safety inspectors... Today in the NY Times there is a story, Offshore Tactics Helped Increase Romneys' Wealth, that looks at clues to how companies like Mitt Romney's Bain Capital have been able to evade paying their fair share of taxes. Here are snippets from this complicated article:

A variety of Bain funds in the Romneys' portfolio have controlling stakes in foreign companies. Had those funds been set up in the United States, the Romneys and other American investors would probably have been subject to certain federal taxes for their ownership of "controlled foreign corporations." Setting up the funds in the Caymans allowed them to avoid those taxes.

Bain and other private equity firms use a variety of mechanisms to help investors avoid those taxes, including setting up offshore "blocker" corporations, a practice that has been criticized in some circles and has prompted legislative efforts to curb it. These offshore corporations become a conduit for money for these institutional investors, as well as foreign investors looking to avoid United States taxes.

The 2011 tax return for the blind trust belonging to Mr. Romney's wife, Ann, released last month, showed holdings, for example, in investment vehicles that control two related funds — Sankaty Credit Opportunities IV, L.P., organized in Delaware, and Sankaty Credit Opportunities (Offshore) IV, L.P., set up in the Caymans.

No comments:

Post a Comment