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article imageMitt Romney's Cayman Islands millions under scrutiny

By JohnThomas Didymus     Jan 19, 2012 in Politics
As the GOP presidential nomination race heats up, questions are being asked about Mitt Romney's personal wealth, especially his offshore investments. Romney has admitted he has millions stashed away in the Cayman Islands, widely known as a tax haven.
According to The Washington Post, Romney has not provided details of his offshore investments or about other investments he has outside the United States. But a report by ABC News says, "there are...reasons Romney may not want the public viewing his returns...Romney has used a variety of techniques to help minimize the taxes on his estimated $250 million fortune...Romney has as much as $8 million invested in at least 12 funds listed on a Cayman Islands registry. Another investment, which Romney reports as being worth between $5 million and $25 million, shows up on securities records as having been domiciled in the Caymans."
ABC News points out that Cayman is a "notorious Caribbean tax haven," implying that Romney is investing in the Cayman Islands to avoid paying tax in the U.S. Jack Blum, a Washington lawyer, commented, "His (Romney's) personal finances are a poster child of what's wrong with the American tax system."
But USA Today reports that Andrea Saul, Romney's campaign spokeswoman, said: "ABC is flat wrong. The Romneys' investments in funds established in the Cayman Islands are taxed in the very same way they would be if those funds were established in the United States. These are not tax havens and it is false to say so."
ABC News, however, reports that Rebecca J. Wilkins, a tax policy expert with Citizens for Tax Justice, said the U.S. government loses an estimated $100 billion a year because of tax havens. Wilkins said, "the primary advantage to setting those funds up in an offshore jurisdiction like the Cayman Islands or Bermuda is it helps the investors avoid tax. It helps foreign investors avoid taxes in their home country, so it's not illegal or improper to set those funds up in a foreign jurisdiction, but it makes it more attractive to investors because it helps them avoid paying taxes on that income."
A view of George Town  the main city of the Cayman Islands  from a cruise ship
A view of George Town, the main city of the Cayman Islands, from a cruise ship
roger4336
USA Today reports that about $250 billion in tax revenue is lost annually by governments worldwide to tax havens and Cayman Islands is ranked among the top tax havens because of secrecy of investments.
Romney is believed to be worth about $190 million to $250 milliion.
Opponents cash in
Of course, Mitt Romney's opponents have seized on the information to launch attacks on him, though The Washington Post says the attacks may not be effective in the "business-friendly environment of the Republican Party electorate."
Newt Gingrich, Romney's top opponent in the South Carolina primaries, has taken a shot at the former Governor of Massachusetts. According to Gingrich, he would be renaming his flat tax the "Mitt Romney 15 percent flat tax.'" Gingrich's statement comes after the revelation that Romney pays tax at a 15 percent rate.
Romney responded to a question put to him Thursday morning about releasing his tax returns. He said he will release the returns but not until April, that is, long after the party has chosen its presidential candidate. Romney said: “You’ll hear more about that. April."
The Washington Post reports that questions about the details of Romney's personal wealth have nagged his presidential campaign, and in recent times he has been forced to make disclosures that raise uncomfortable questions. Many eyebrows were raised when Tuesday, he revealed that he pays an effective task rate of about 15 percent. This is less than what Americans who receive paycheck pay. He also raised questions when he disclosed that he does not earn "much" from speech-making fees, only about $373,327 for 12 months in 2010 to early 2011.
Scrutiny of Romneys private wealth could not come at a worse time, The Washington Post comments. Romney needs sustained momentum to ride over challenges in the ongoing primaries. Unfortunately, Romney, in recent times, has been giving his opponents opportunity to attack him with insinuations that he is a wealthy man out of touch with the circumstances of ordinary Americans. He gave that impression especially with his recent comment about health insurance companies that, “I like being able to fire people who provide services to me.”
More about Tax returns, Cayman islands, offshore investments, Mitt Romney
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