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Saturday, August 18, 2012

Mitt Romney's tax woes

This picture of Mitt Romney at the helm of his power boat, surrounded by his family, could be an ad for the American dream - in America, you too can be a successful businessman, just like me.

But the Democrats are suggesting that Romney pays less tax than many middle-class Americans and his policies would favour the rich.  Under pressure, he released his 2010 tax return in January which showed he paid 13.9 per cent on his 21.7 million dollar income but the Democrats aren't satisfied, they want five years.

Obama's campaign manager Jim Messina wrote to Romney's campaign boss.   ".....If the Governor will release five years of returns, I commit in turn that we will not criticize him for not releasing more - neither in ads nor in other public communications or commentary for the rest of the campaign."

There's a black cloud hanging over Romney simply because he's one of the richest men to ever run for the Presidency and there's a suspicion that he could be receiving special treatment by paying very little, or no tax.

Romney has offshore accounts.  Newt Gingrich said, "I don't know of any American President who had a Swiss bank account."  Mitt's $3 million Swiss bank account appeared in his 2010 returns but disappeared in 2011 after the trustee closed it.

Mitt also has interests in tax havens in Bermuda and the Cayman Islands.  Bain Capital is the heart of Romney's fortune and even though he left the company in 1999, his finances are still tied up there and in June, he revealed more than $2 million in new Bain income.  Today Bain has 138 funds in the Cayman Islands and Romney has a personal interest in 12 of them, worth $30 million, hidden behind confidentiality disclaimers.  He denies saving tax this way but there's no way to check.

Mitt's father George Romney released 12 years of tax returns in November 1967, just ahead of his presidential campaign which set a precedent for future presidential hopefuls.  But Mitt refuses to follow his father's example and we can only wonder why.  "I pay all the taxes that are legally required, not a dollar more" Mitt said.

That reminds me of what Kerry Packer once said "I pay the tax I am required to pay, not a penny more, not a penny less.  If anyone in this country doesn't minimize their tax, they want their heads read."