Romney explains Cayman accounts, confusingly, as a benefit to "Foreign Investors" [View all]

[maddezmom]

By Reid Pillifant

1:47 pm Jul. 17, 2012


Today, after a couple weeks' worth of unshakeable attacks from Democrats about his extraordinary off-shore tax sheltering, Mitt Romney made his most direct attempt to date to explain his system of personal investments, in an interview with National Review.

¬snip¬


The exchange:


From a political perspective, a lot of pundits wonder why you haven’t gotten rid of your offshore accounts. Can you explain why you have not done that?

Well, first of all, all of my investments are managed in a blind trust. By virtue of that, the decisions made by the trustee are the decisions that determine where the investments are. Secondly, the so-called offshore account in the Cayman Islands, for instance, is an account established by a U.S. firm to allow foreign investors to invest in U.S. enterprises and not be subject to taxes outside of their own jurisdiction. So in many instances, the investments in something of that nature are brought back into the United States. The world of finance is not as simple as some would have you believe. Sometimes a foreign entity is formed to allow foreign investors to invest in the United States, which may well be the case with the entities that Democrats are describing as foreign accounts.

The obvious problem with that explanation would seem to be that Romney isn't a foreign investor. In his case, particularly with regard to his I.R.A., employing an island pass-through allows him to avoid paying the Unrelated Business Income Tax on that investment.


the NRO interview if anyone is interested:
http://www.nationalreview.com/corner/309673/romney-tax-returns-i-m-simply-not-enthusiastic-about-giving-them-hundreds-or-thousands