Saturday, August 25, 2012


ACTUALLY....... It was make public, a few day ago, that our well known presumptive Republican candidate for President, Governor Mitt Romney, has made use of some secret techniques of its Cayman Islands based funds to avoid taxes.  This is according to Bain Capital's private audit and financial records that were made public on Gawker website.  The statements made use of "blocker" entities, which are useful to help retirement and nonprofit entities avoid taxes.  Financial statements for another fund states that it "intends to conduct its operations so it will....not be subject to United States Federal income or withholding tax. These details are on the statements of two funds in which Romney still holds in a large investment, "according to the financial disclosure statements he filed when he announced his bid for president".

I truly believe that the Bain documents on the Gawker website could ignite a debate about Romnney's role at the company, and "specifically about Bain's decision to domicile many of its funds in offshore locations known as tax havens". Critics say that Romney's investments in these funds are an example of how wealthy Americans can hide their investments to limit the amount they pay in taxes.

Romney's tax returns have been at center stage in his campaign.  A press conference that was to focus on his medicare plan quickly turned to Romney's tax returns, and whether he has ever paid less than 13.9%.  He continues to ignore this issue and has called the questions "small-minded".

He continues to say that he will not release more than two years of returns.  These newly released documents have once again brought up the more technical questions about Romneys investments  -  the use of so-called "blocker" entities.  "The 'blocker' is a paper that serves as a buffer between the investor and the fund holding the investments.  That means the investment income can be counted as a dividend and in some cases avoid income tax".

It's interesting that in the financials for the Bain Capital Asia Fund, the audit describes the use of "blocker corporations" to hold more than $92 million in contributions from the fund.  "There have been financial experts that have pointed to the 'blockers' to explain how Rommey has been able to amass between $20.7 million and $101.6 million in a tax free IRA, many times more than the typical amount an IRA can hold.   Romney has not responded to questions about his IRA.