Some investments listed in Mitt and Ann Romney’s 2010 tax returns – including a now-closed Swiss bank account and other funds located overseas – were not explicitly disclosed in the personal financial statement the GOP presidential hopeful filed in August as part of his White House bid.
The Romney campaign described the discrepancies as “trivial” but acknowledged Thursday afternoon that they are undergoing an internal review of how the investments were reported and will make “some minor technical amendments” to Romney’s financial disclosure that will not alter the overall picture of his finances.
At least 23 funds and partnerships listed in the couple’s 2010 tax returns did not show up or were not listed in the same fashion on Romney’s most recent financial disclosure, including 11 based in low-tax foreign countries such as Bermuda, the Cayman Islands and Luxembourg.
The campaign has stressed that Romney has paid all required U.S. taxes on his foreign funds.
Many of the funds are affiliated with Bain Capital, the Boston-based private equity firm Romney ran for 15 years. Several others are apparently unrelated offshore entities based in the Cayman Islands and Ireland.
As Ben Domenech notes in his Transom, Mitt Romney’s advisors have now advised him to support “a $2 gas tax, a VAT, and open Taliban talks.” Add to that list not repealing Obamacare. Norm Coleman, an advisor to Romney, went on record saying
We’re not going to do repeal. You’re not going to repeal Obamacare… It’s not a total repeal… You will not repeal the act in its entirety, but you will see major changes, particularly if there is a Republican president… You can’t whole-cloth throw it out. But you can substantially change what’s been done.
Four years ago, Mitt Romney attacked John McCain for having a campaign run by lobbyists. Now, it turns out two of his closest advisers and surrogates lobbied for Freddie, a point which seems to undermine the notion that Gingrich’s work on behalf of the group would be a disqualification.
It’s also interesting to note that while Gingrich’s contract specifically identified him as a consultant, other ex-lawmakers were specifically working as lobbyists. And while Romney (and others) have questioned the veracity of Gingrich’s claims, Mitchell Delk, a former chief lobbyist for Freddie Mac, told Bloomberg News in a November interview that he hired Gingrich as a consultant during an earlier stint between 1999 and 2002 to provide feedback on Freddie Mac initiatives.
The number of Americans with negative views of Mitt Romney has spiked in a new Washington Post-ABC News poll, compounding the former Massachusetts governor’s challenges as he tries to rally from Saturday’s big loss in South Carolina.
Among independents, Romney’s unfavorable rating now tops 50 percent — albeit by a single point — a first in Post-ABC polling back to 2006. Just two weeks ago, more independents had favorable than unfavorable views of Romney; now, it’s 2 to 1 negative.
The difference between Newt Gingrich and Mitt Romney can be summed up in a pivotal moment at the Republican debate on Monday night. When Newt Gingrich told Mitt Romney that investment income would not be subject to tax under his tax plan, Mitt Romney did not express the joy that one might expect given most of his income is derived from investments. Rather, Mitt displayed shock and disdain.
Newt calmly explained that according to Alan Greenspan, the best way to maximize economic growth is not to tax investment. By not taxing investment, Newt would create an environment for maximum job growth and restore America’s economic vitality. While Mitt Romney believes his management skill will help restore economic prosperity, Newt Gingrich wants the American people to create their own prosperity.
Barack Obama wants to make the 2012 election about income inequality. Rich vs poor. Haves vs have nots. Newt Gingrich wants to level the playing field by giving everyone the option of being taxed at the lower rate the “rich” are currently being taxed at. These are the rates that all investment income is taxed at, however higher income Americans tend to derive more of their income from investments. Progressive tax codes discourage work because they tax additional income at higher rates. Where Obama wants to raise rates, Newt wants to lower them.
Later in the debate, Mitt Romney claimed that he wants to make U.S. taxes competitive with the rest of the world. Yet, noticeably absent from his economic plan is an effort to lower the U.S. corporate tax rate. One of the reasons so many manufacturing jobs go offshore is that the U.S. corporate tax rate is dramatically higher than other nations. Also, unless the profits of U.S. foreign subsidiaries are repatriated, the U.S. Treasury never receives any taxable income. This system encourages U.S. corporations to defer taxes incurred by their foreign subsidiaries indefinitely. It is no wonder that many companies develop products in the United States but manufacture them abroad.
Newt Gingrich aims to rectify this discrepancy by lowering the U.S. corporate tax rate to that of one of our chief foreign competitors, Ireland. By doing this and preventing companies from deferring their foreign profits indefinitely, Newt removes the incentive for companies to manufacture abroad. Further, Newt generates revenue for the U.S. Treasury that had existed only theoretically in the past.
Mitt Romney claims to be interested in the taxes of the American people but the only tax reduction his plan provides is a modest proposal to eliminate the capital gains tax for a class of income earners that historically has had very few capital gains. Mitt Romney even flirted with raising taxes by suggesting his support for a V.A.T during a late December interview with the Wall Street Journal editorial board.
Newt Gingrich is the only candidate that eliminates taxes on investment, makes our corporate tax rate competitive with the rest of the world so large companies will want to relocate to the world’s largest market, and flattens and lowers the personal income tax rate for everyone.
Given that Mitt Romney claims to “know how jobs come and how jobs go,” it is surprising that he has not offered an aggressive tax reform plan. It is difficult to envision how President Romney would encourage economic growth without one. Mitt Romney might be better off returning to Bain Capital and enjoying the 0% capital gains tax rate that President Gingrich would afford him.
Under current tax law, anybody investing an IRA in a private-equity fund, as Mr. Romney did, would likely incur a hefty special tax on “unrelated business income,” also known as UBIT. This tax, assessed at a maximum 35% rate, is meant to discourage tax-exempt entities such as an IRA, pension plan or endowment fund from unfairly competing with for-profit, taxpaying entities by operating a business without paying taxes on it. Investing in a partnership that uses debt to buy companies would trigger the tax, experts said.
It isn’t known whether Mr. Romney paid UBIT. His filings suggest use of a strategy involving offshore funds sometimes employed to avoid it, according to several experts.
One method used by tax lawyers is to have the IRA invest through an offshore affiliate of the private-equity firm, known as an offshore blocker corporation, which in turn invests the same money in the private-equity partnership. The tax is avoided because the IRA technically is investing in the offshore corporation, not in a private-equity partnership.
Tax experts say that might explain why Mr. Romney’s IRA includes holdings in Bain entities based in offshore locations, including one Cayman Islands entity that Mr. Romney listed as having a value between $5 million and $25 million.
It’s conventional wisdom in Republican circles here in South Carolina that if Mitt Romney wins the state’s primary this Saturday — having already won in Iowa and New Hampshire — he’ll be the GOP presidential nominee.
“If for some reason he’s not derailed here and Mitt Romney wins South Carolina — no one’s ever won all three — I think it should be over,” Sen. Lindsey Graham said Sunday. “That would be quite a testament to his ability as a candidate and a campaigner.”
But what if Romney did not actually win Iowa? That could change the calculation considerably. And there is a very real chance that the Republican Party of Iowa will announce this week that Rick Santorum, and not Romney, won the Iowa caucuses.
Results released on caucus night — actually, at 2 the next morning — showed Romney won by eight votes, 30,015 to Santorum’s 30,007. Many observers assumed that those results were final, especially when party officials said there would be no recount.
But the results were not final. Even though there is no provision for a recount in the party caucuses, state GOP rules do require that the results be certified, which is nearly the same thing. That certification process began the day after the caucuses and is expected to wrap up this week, yielding a final, official vote tally.
The final numbers will be different from those released on caucus night. One campaign source says the vote count as of midday Monday showed Santorum ahead by 80-something votes. If that number holds through certification of the last precincts, Santorum will win. Of course, there is always the possibility that some of the final precincts will contain discrepancies that put Romney back on top. It’s just not clear.