“Trust me, and I won’t let you verify.” [UPDATED]
I just suggested to the Romney campaign that they do an ad highlighting the sheer arrogance of Romney’s “Trust me, and I won’t let you verify” theme, on his personal finances and on the specifics of his “plan” (see my post from yesterday, below) and how, exactly, it could be expected to grow the economy rather than crash it.
UPDATE: Occasionally I update a post of mine by adding all or part of an exchange between a commenter to the post and me when I think the exchange illustrates or adds something important. The following exchange between a reader named David Michel and me warrants it, I think:
DAVID MICHEL: bev, baby even john stuart mocked harry reed on this point. why dont you just go to work for obummer,wait you aredy did!
ME: Actually, David, I share Jon Stewart’s dismay and anger about Reid’s statements, partly because the tactic is so obviously appalling, and partly for the reason that your comment highlights: Some people aren’t (or pretend not to be) smart enough to understand the distinction between, on the one hand, whether Romney failed to declare and pay taxes on his overseas bank accounts (especially his Swiss one) until 2009 and then took advantage of the IRS’s new and temporary amnesty program that year to declare the account(s) and pay the taxes with no criminal liability, and (separately) whether he significantly misrepresented the value of the securities he placed in his IRA account in the Cayman Islands (according to numerous experts, the only plausible explanation for how the value of that account [came]* to now be between $20 and $101 million), and, on the other hand, whether instead, Romney paid no taxes at all for 10 years.
Reid’s allegation makes what ACTUALLY happened seem suddenly trivial—which it is not—and draws attention away from [those most] likely possibilities.
Look. There are only two reasons why Americans use foreign bank accounts in Switzerland, the Cayman Islands and [Bermuda]. One is to avoid or evade paying taxes on the income placed into the accounts and on the interest on the accounts. The other is to launder illegally-gained money (e.g., drug money). The chance is really, really small, I’m sure, that Romney’s reason was the latter. That leaves the former. Romney says that he saved no money on taxes by maintaining those overseas accounts in those countries, but he does not say, then, why he had and has those accounts there. Nor does he say how he was able to parley the maximum annual deposits into his IRA account into such a huge amount of money, nor why he chooses to keep his IRA account in the Cayman Islands.
That he and his wife have pronounced the answer to these mysteries none of the public’s business is itself significant, not just because of what it suggests about what those answers are but also what it says about their view of what is and what is not relevant to the public’s [informed decisionmaking] about who should hold the office of the presidency.
These are serious issues. I doubt that Romney will make it all the way to November with being asked point-blank by a reporter questions along the lines of those I’ve stated. But, who knows?
feeling a little quixotic, are we, beverly?
Am I safe in assuming if Romney wins the election you won’t be asked to join his administration?
bev, baby even john stuart mocked harry reed on this point. why dont you just go to work for obummer,wait you aredy did!
Actually, David, I share Jon Stewart’s dismay and anger about Reid’s statements, partly because the tactic is so obviously appalling, and partly for the reason that you comment highlights: Some people aren’t (or pretend not to be) smart enough to understand the distinction between, on the one hand, whether Romney failed to declare and pay taxes on his overseas bank accounts (especially his Swiss one) until 2009 and then took advantage of the IRS’s new and temporary amnesty program that year to declare the account(s) and pay the taxes with no criminal liability, and (separately) whether he significantly misrepresented the value of the securities he placed in his IRA account in the Cayman Islands (according to numerous experts, the only plausible explanation for how the value of that account to now be between $20 and $101 million), and, on the other hand, whether instead, Romney paid no taxes at all for 10 years.
Reid’s allegation makes what ACTUALLY happened seem suddenly trivial—which it is not—and draws attention away from these mostly likely possibilities.
Look. There are only two reasons why Americans use foreign bank accounts in Switzerland, the Cayman Islands and the Bahamas. One is to avoid or evade paying taxes on the income placed into the accounts and on the interest on the accounts. The other is to launder illegally-gained money (e.g., drug money). The chance is really, really small, I’m sure, that Romney’s reason was the latter. That leaves the former. Romney says that he saved no money on taxes by maintaining those overseas accounts in those countries, but he does not say, then, why he had and has those accounts there. Nor does he say how he was able to parley the maximum annual deposits into his IRA account into such a huge amount of money, nor why he chooses to keep his IRA account in the Cayman Islands.
That he and his wife have pronounced the answer to these mysteries none of the public’s business is itself significant, not just because of what it suggests about what those answers are but also what it says about their view of what is and what is not relevant to the public’s making an informed decision about who should hold the office of the presidency.
The post attempts to make an important point. I just updated it to make clear why I think it does.
And rest assured that if Obama wins, I won’t be asked to join his administration either. That’s one thing he and Romney have in common.
@David Michel, you made an ad hominem attack on Ms. Mann, spelled Jon Stewart’s name wrong and completely missed the point to Stewart’s piece (which I’m assuming you didn’t actually watch). Well done!
There is a third reason for bank accounts in Switzerland, the Cayman Islands and Bermuda; to protect assets from possible lawsuits.
There is a third reason to put money offshore to shield yourself from lawsuits, such as malpractice. A fourth reason is to shelter the assets from a spouse who might divorce you (all be it in that case it might be really called money laundering).
Americans cannot open bank accounts in Bermuda.
In fact, banking in Bermuda is limited to individuals who reside there.
According to numerous news reports, Romney has a bank account in Bermuda. See, e.g., “Romney’s ‘Bermuda-Gate’: Why His Offshore Bank Accounts Really Matter,” Huffington Post, Jul. 11, at http://www.huffingtonpost.com/sanjay-sanghoee/romney-offshore-tax-havens_b_1664722.html. The author writes:
“Having worked on Wall Street, I am not surprised that Romney has bank accounts in places like Bermuda and the Cayman Islands, which are well-known tax havens; in some cases, money is kept offshore to facilitate foreign investments, but the overwhelming reason is to save on taxes. After all, it is perfectly legal and if the U.S. tax code allows it, then why should a businessman not take advantage of it?”
In my original comment in response to David Michel, if said “the Bahamas” rather than Bermuda, but when I was updating the main post to add the comments exchange between Michal and me, I remembered that Romney’s account is in Bermuda, not the Bahamas, so I removed “the Bahamas” and replaced it with “Bermuda” in brackets.
The Huffington Post article does point out another possible reason for an American to have offshore accounts: to facilitate foreign investments. But the decision to have those foreign accounts in those particular countries strongly suggests that the choice was based at least in part on a desire to avoid or evade taxes, or a desire to hide the fact of the foreign investments, or both.
Romney’s and his wife’s claim that such matters are none of the public’s business—that the public doesn’t “need” such information—is offensive.
Anonymous, here’s what the Obama campaign website says about Romney and Bermuda:
“For many years Mitt Romney has kept secret a Bermuda-based corporation he owns, even shifting it to a trust the day before becoming governor of Massachusetts—then keeping it off disclosure forms he was required to file in Massachusetts. But when he released one full year of tax returns—under pressure from fellow Republicans—it was discovered that he and his wife have full ownership of this corporation. Shell corporations like this one are sometimes established in tax havens to avoid U.S. taxes. Romney continues to omit the Bermuda company from financial disclosure statements he’s been required to file when running for office.
“While the Romneys’ spokespeople insist that the couple has paid all the taxes required by law, investments in tax havens such as Bermuda raise many questions, because they are in ‘jurisdictions where there is virtually no tax and virtually no compliance,’ as one Miami-based offshore lawyer put it.” —Vanity Fair
I read the entire Vanity Fair article right after it was released early last month, and those two paragraphs from that article refreshed my memory.
Apparently, the standard way for foreigners like Romney to get a bank account in Bermuda is to establish a shell corporation in Bermuda and have the corporation open a bank account there (the corporation has “residency” there), and funnel overseas transactions through the shell corporation and into the corporation’s bank account.
This is something that I hope the Obama campaign begins to discuss in ads. There’s simply no possible explanation for this other than that Romney was (and is) using this corporation to hide large financial gains from foreign investments. The only possible reasons to do that is to hide the source of the money (what the foreign investments ARE), or to hide the money itself, probably from the IRS.
I was not aware about the Romney’s lost step for paying his taxes, thanks for updating this article because now I came here and came another interesting thing about the participant of the American presidential position.
Beverly Mann carrying the water for the Obama campaign.
We KNOW that Romney has paid all the taxes he has due How do we know this? Because the IRS vetted his returns and didn’t challenge them.
So if you don’t like the way or amount Romney paid, it’s the laws that need to be changed. Romney undoubtedly had top tax lawyers and accountants so that he didn’t overpay his taxes. Very few people willingly overpay their taxes, do you?
Easy enough then . . . Mittens should post them. Mittens pays less of a percentage in Federal Taxes than I do and makes 20 times I do in Gross Income.
Why s that Sammy? Is it because Payroll Taxes can be taxed to 35% while Capital Gains Stateside is taxed at 15%?
Why should we accept this?
sammy carrying water for the Romney campaign. Romney may indeed have paid all the taxes he has due. That doesn’t mean his taxes might not be ludicrously low because of wacky tax rules that are only available to the very rich.
Why doesn’t he release them? It looks bad that he doesn’t. His dad did. Most of the recent presidents did.
Politically, I don’t get to call for Richard Mellon Scaife to release his taxes and let me see what the incredibly wealthy are up to there. But I do get to call for Romney to release his taxes, because most presidential candidates feel it’s a good idea to be transparent with this and the precedent has already been established.
“Why should we accept this?”
Because it is the law.
Romney has released his 2010 and 2011 returns (which are the last 2 years). That is what McCain released in the last election.
You, Beverly, and Obama just want more so you can continue to distort whatever is in them do distract from the horrendous Obama/Lib performance. Fair enough, but Mitt aint playin that game. Good on him.
Sammy Romney has not released his 2011 returns, only promised to do so. Eventually. Perhaps the Seventh of Never.
And released incomplete versions of his 2010.
McCain lost. Maybe in part because voters didn’t trust a rich man who couldn’t tell you off the top of his head how many houses he owned. Maybe not the right precedent to cite here.
As to the IRS “vetting” Mitt’s taxes, well not everyone gets a thorough audit, plus if say Mitt used perfectly legal tax strategies to reduce his liability to zero in 2009 or perhaps years prior, the IRS might well conclude “no legal foul, no jail time for tax fraud”. Which doesn’t translate to being able to sell effective tax rates even below the 13% level Mitt admitted for 2010.
Even now Americans retain some lingering sense of fair play and burden sharing. And frankly the Leona Helmsley defense of “Only the little people pay taxes” didn’t serve her well.
It is one thing to not “overpay” your taxes, it is something else to pay millions of dollars to lawyers and accountants to reduce your tax liability to zero even as you advocate adding 100,000 troops to the Army and vastly expanding the Navy.
I don’t think the revised slogan “Trillions for defense, not a penny for the IRS” rings quite as well as “Millions for defense, not a penny for tribute” did back in day. Particularly from a draft dodger with five sons who decided they had other priorities than serving their country in uniform.
Mitt wants to go to war on Iran. On your dime and using your kids for cannon fodder. Nice.
I’d bet that the IRS audited the tax returns of a good number of holders of Swiss and other tax-haven bank accounts in addition to the Romneys over the years, who then suddenly rushed to take advantage of the amnesty program that the IRS offered in 2009 to people who had Swiss bank accounts whose identities the Swiss banks finally agreed in late 2009, under intense pressure from the U.S. government, to reveal. The IRS and the Justice Dept. agreed to the amnesty program, which required interest payments and penalties but immunity from criminal liability, because it turned out that there were so many of these tax evaders that it would have been impossible to prosecute most of them. According to the Vanity Fair article last month that exposed to the public Romney’s foreign bank accounts (including the Cayman Islands IRA that is valued at between $20 million and $101 million) and the shell corporation in Bermuda, top tax attorneys all over the country were inundated in late 2009 with requests for help from Americans who hadn’t declared the existence of their Swiss accounts and feared prosecution.
My point is that the IRS had no way to learn of the Romneys’ Swiss account (or accounts) until 2009. Romney didn’t close the now-revealed Swiss account until 2010, so it shows up in his 2010 returns. That account had $3 million in it either when it was opened or when it was closed; I can’t remember which. But he may well have had other Swiss accounts and closed them in 2009. And unless he declared his OTHER foreign tax-haven accounts, the IRS would have had no way to know of them either. Presumably, the 2009 IRS amnesty program pertained to offshore accounts anywhere in the world, not just to Swiss accounts, and although the other countries were not about to disclose the identities of the account holders, Romney (and others) might have used the 2009 amnesty program for those accounts, too, for fear that eventually those countries would give in to pressure and disclose that information.
As for your retort to run that “it’s the law,” Sammy, run’s point is that the public is entitled to know just how much this guy benefits from the current favor-the-rich tax code and how much he would benefit from the further skewing of the tax code toward the rich under the policies he proposes.
Good points Beverly. If Romney gets in office you can bet the tax code is going to be swung his way even further. We aren’t allowed to check the tax returns for the rich unless they volunteer them; with a presidential candidate we have some leverage to make him do it.
A minor asterisk to Beverly’s assertion about who might have a Swiss bank account: there are a few people who may have lived in Switzerland in the past, who travel there regularly for shorter and longer visits, and who have professional expenses in Europe that are maddeningly difficult to pay from an American bank account, whereas they can be paid online in seconds from a Swiss postal bank accounts.
Such people might have a Swiss bank account, religiously reported to the IRS in the rare years it holds more than $10,000, without using it either to evade taxes or to launder income.
Just an asterisk, to be sure. As far as I know, Mr. Romney has never lived in Switzerland, and does not travel there regularly. Whether he reported his Swiss bank account(s) when they had over $10,000 to the IRS is impossible to know, given his refusal to release complete tax returns and forms.
‘it’s the law’
sammy, the point of elections is to decide what kind of laws we are going to have and what kind of people we are going to have making those laws.
i am entirely on your side in this. but when you say ‘the only possible…’ you put yourself into the intellectual company of people like david michel who is pretty sure if he can’t think of something there is no possibility it exists. so of course he works very hard at not thinking of things he doesn’t want to exist.
PQuincy, you make an important point. I had never heard of the Swiss Postal Bank, but just googled it, and here’s what the Offshore Manual says about it:
“This account is opened with Swiss Post, a company founded in 1849. With over 43,000 employees, 3,400 offices and Sfr.1,600 million in capital and more than 2 millions accounts, Swiss Post manages most of the Swiss domestic payment traffic. In Switzerland people pay most of their bills (such as rent, electricity, phone, etc…) using Swiss Post. These financial services are so successful that a fully owned subsidiary has been created to take care exclusively of the financial services, Postfinance with 1,600 full times employees.
“In terms of security, Swiss Post is one of the most secure institution in Switzerland. With over 150 years of existence, it began offering financial services in 1906. Swiss Post has a balance sheet total of Sfr.28 billion for 1 billion of customer deposits and is fully owned by the Swiss Confederation.
“Excellent internet banking system in English, French, German and Italian. The system enables you to view your account statements online and to transfer money to any bank account in the world 24 hours a day. It uses 2 passwords and a scratch list with 128 bits encryption for optimal security. At Carlton Press we use such an account to receive payment from our clients and to pay our international suppliers.”
Although most people don’t know this, the U.S. once had such a bank, called the Postal Savings, which had very low interest rates but, pre-New Deal, was backed by the federal government. So during the Depression, people with deposits there didn’t lose their savings. (I know about it because of a hilarious story in my mother’s family about a family Postal Savings account.)
And there are, I suppose, reasons for someone to want to hide money that don’t violate U.S. tax law or don’t amount to some other type of fraud—which hiding money in order to avoid paying court judgments or hiding it from your spouse during a divorce proceeding is.
But the account that Romney closed in 2010 was at UBS, not the Swiss Postal Bank, and it had $3 million dollars in it. And all of Romney’s other offshore bank accounts, both directly in his name and via shell corporations, apparently also were in tax-haven countries with bank laws that prohibit the banks from ever disclosing the identities of account holders to government agencies, foreign or domestic.
And there’s almost certainly a particular reason why Romney won’t release his 2009 tax returns. That reason probably relates in some respect to the 2009 IRS amnesty program—and my bet is that there’s more than just that one account that he was hiding: Swiss, Cayman Islands, Bermuda (via shell corporations). Remember: Romney ran a serious campaign for the presidency in 2008. Did he expect that if he won the nomination, there would be no pressure for him to release ANY years’ tax returns? Or did he plan to release some, since they wouldn’t have reflected what he wants to keep from the public now?
And also remember: He reportedly handed over 28 years’ of tax returns to the McCain campaign when he was (supposedly) being considered as McCain’s running mate. Could he really trust that those tax returns would always remain confidential? Or was there nothing in them that could prove harmful to him, because he was failing to disclose things he was legally obligated to disclose.
I would LOVE to see the Obama campaign do an ad that deals with (1) the Bermuda shell corporation and its possible purposes; (2) the magical IRA; and (3) the 2009 IRA amnesty program and the agreement with UBS and (I think) other large Swiss banks in 2009 to disclose to the IRS the identities of account holders who were U.S. citizens.
The ad should NOT be one of those snarky-voiced things with photos of Romney on his ski jet (or whatever). It should be simply an explanation by a credible, very experienced tax lawyer—and should show the lawyer speaking. Nothing more—or less.
A few points about a few comments:
We don’t need to rely on reporters to ask Romney questions about his taxes (thank the stars). Politicians are doing it. There is also a pretty good chance that there will be presidential debates, and that Obama will ask. Sadly, debate is a forum that rewards the most cynical forms preparation more than honesty.
Reid is not an honest broker, but he isn’t paid to be. If his outrageous comments have detracted from the impact of what Romney is more likely to have done, I’m not sure that matters much. We have little reason to expect know what Romney actually did. Reid’s wild comments keep the focus on Romney’s taxes, and may improve the odds that we will get a look. Otherwise, Romney’s response helps to keep his failure to release his tax forms in focus. “Prove I didn’t pay taxes!” thunders Romney. “Prove you did”, smiles Reid.
And Spammy, well, Spammy has a unusual idea of what the word “KNOW” means. (Perhaps “know” in all caps has a meaning with which I am unfamiliar?) We don’t know that Romney has paid all his taxes just because he presented tax returns to the IRS. We only know that he presented them and the IRS chose not to pursue a case. That’s what we know. And it’s pretty obviously all we know. Sheesh.
As others have observed in response to Spammy, Romney’s tax returns contain more than just legalities. The contain evidence of his behavior. Since we are in the habit of using behavior to determine qualification for jobs, and Romney wants us to hire him for a great big job, it is pretty suspicious that he is hiding years and years of his economic behavior from us. It is really just another bit of misdirection from Spammy to pretend that legality is the only issue in Willard’s tax returns.
Yall’s fixation on Romneys’ tax returns is ridiculous.
You’ll find that Romney 1)Made a lot of money 2) Legally minimized his taxes. (JUST LIKE EVERYBODY ELSE). 3) Donated a lot to charity.
What else do you want to know, or think you can figure out?
Sammy, perhaps we will find that the tax code needs to be changed to close loopholes used by the very rich that are not obvious. Perhaps not. In any event, why is it important that we not do so?
It is not necessary to get Romney’s tax returns to find out loopholes. The loopholes are well known….. they are written into the tax code (in general) to encourage certain economic behaviors. This is all a smokescreen to get more returns so that shills like Bruce Webb and Beverly Mann can say “he only paid X% on $$$$M in income.”
The whole Bermuda bank thing is similarly a smokescreen. No one accuses Romney of making the money illegally, so it is just money that has been earned and invested abroad that Romney doesn’t want to pay the 35% repatriation tax on to bring it bsck to the US.