Romney Had Bermuda Accounts

January 24, 2012

GOP Presidential candidate Mitt Romney reported financial accounts in Bermuda and the Cayman Islands according to a summary of his 2010 tax form made public by his campaign today [Jan. 24].

Under increasing pressure from his rivals in the Republican field to provide details of his US federal tax returns, Mr. Romney revealed he had paid a total of $6.2 million in taxes on $45 million in income over the two tax years of 2010 and 2011.

He had previously refused to release his returns, even when he was elected governor of Massachusetts in 2002.

Mr. Romney paid an effective tax rate of about 14 percent compared to the 11 percent average effective rate of American taxpayers according to an analysis by the non-partisan Tax Foundation think tank in Washington DC. While millionaires like Mr. Romney normally pay about about 25 percent in tax, the foundation said his use of legal loopholes in the US tax code brought his rate down.

Mr. Romney’s direction of tax avoidance activities involving offshore financial centres like Bermuda when he headed private equity firm Bain Capital in the 1980s and ’90s is now threatening to become a major campaign issue in the 2012 Presidential race.

His 2010 returns also showed that among his network of overseas investments, he had a financial account in Switzerland that was closed that year.

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  1. Hmmmmm says:

    This is just appalling. Next thing you know Bermudian politicians will have accounts in the USA. Shock.

  2. A US taxpayer says:

    “…compared to the 11 percent average effective rate of American taxpayers…”

    This statement is rather confusing. 11% for the average taxpayer? Which taxpayers? People who are earning $30,000 per year are paying significantly higher percentages than that, 25%-35%.

    Look at this quote from Warren Buffett’s New York Times Op-Ed piece from August 14, 2011:

    “Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent. ”

    To leave the impression that Romney has paid a higher percentage (“more”) than the average taxpayer, that he is paying his fair share into the American tax coffers is deceptive, and just another layer to the mask behind which the super-rich 1% of US citizens hides.

  3. wiaruz says:

    Looks like Buffett needs to find out who does Romney’s taxes.

    Earned income is taxed at a higher rate than dividend income. It’s pretty much as simple as that. Both Romney and Buffett make sure that their “earned” income is as little as possible.

    • A US taxpayer says:

      Yes, I understand the difference in tax rates for different income types. And your joke aside, it comes down to tax laws that favor those who essentially ‘move money around’ as opposed to those who labor to earn theirs. That’s where the inequity lies. Another example of this is Gingrich who, through his S corporation earned well over $3 million through his public speaking and work with Freddie Mac — an amount on which his personal compensation should have been based and taxed — but because of a loophole in the tax law, his corporation paid him only $250,000 and THAT was the amount on which his tax was based. Can one honestly believe that Gingrich did NOT receive any benefit from that gap between $250,000 and $3.5 million?

      It’s much the same with Romney.

      As far as Warren Buffett is concerned, he openly admits a great part of his wealth comes from ‘moving money around,’ and that his cadre of tax attorneys take full advantage of current tax laws — something he has said he doesn’t ‘fault’ Romney for doing as well. But Buffett is also the one super-wealthy person who has been calling for tax reform the longest, calling for changes to be made in tax laws so that the wealthy pay more of their fair share. Others of the wealthiest (such as Ben Stein and Bill Gates) have been adding their support to changes that would raise their tax contributions. Perhaps because they understand that as the middle class buckles under the burden of supporting a greater piece of the American pie, so shrinks the consumer base that buys their products and services. With enough shrinkage, their own wealth and success is threatened.

      It all boils down to the one simple idea expressed by Franklin D. Roosevelt:

      “…Taxes shall be levied according to ability to pay. That is the only American principle.”

      The issue is the fairness by which fiscal responsibility is spread through all the earning strata of the country so there is an equalized burden on all individuals. For why should the dollar of someone earning only $30,000 per year lose one-third of that to taxes when the dollar of someone earning $30 million per year pays only half that percent? The equation may make sense on the surface, but compare the two cases and it doesn’t take much more thought to see that supporting a lifestyle and family on less than $25,000 per year has a far greater struggle than living on $25 million.

      And if I may, one more quote from the great FDR:

      “True individual freedom cannot exist without economic security and independence. People who are hungry and out of a job are the stuff of which dictatorships are made.”

      (Let’s not forget that it happened less than one hundred years ago in Germany, when joblessness and poverty catapulted to power a dictatorship that threatened to overtake the world.)

      We must remember that we are in perilous economic times, with far too many people losing jobs, homes, security, and any confidence for their family’s future. Continuing tax laws that uphold a marked inequity between the wealthy minority and the working majority will only drive more of the latter into becoming a poverty-ridden burden that cannot contribute, and must be either supported or discarded.

      The frightening thing is that it’s happening on more than just American shores. A global economy means that we are all much more interdependent on each others’ countries and what affects one has a much greater opportunity to spread to another. We ALL must take care to work on correcting the problems in our own backyards as much as possible to revitalize and strengthen our economies in the hope that these positive results will spread to other shores just as the negative ones have.

  4. Rhonda says:

    This is the reason the world is going down the drain…Greed…just pure greed… …how is it fair that money earned from hard working sweat pays a higher tax rate …..than money earned from phony financial products…Like the ones that caused the financial melt down…I guess people with money will always have money…and those without will never get…