Tag Archives | Mitt Romney

Corporate Cayman Islands tax shelters rip off U.S. taxpayers

*”Corporations are people, my friend.”
–Mitt Romney, August 11, 2011

Statistic of the day: A single five-story office building is the registered address of more than 18,000 companies.

How is that possible? Well, the building is in the tax haven of the Cayman Islands, and most of those businesses are registered there only for tax purposes.

As Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund explained in a report earlier this year, more than 70% of the Fortune 500 had subsidiaries in tax havens in 2013. The report estimates that multinationals are using these subsidiaries to avoid approximately $90 billion in federal income taxes annually.

US companies reported $129 billion in earnings in the Cayman Islands, Bermuda, and the British Virgin Islands in 2010. “Assuming you believe those figures, the productivity of workers in those countries is amazing,” Floyd Norris, his tongue almost bursting out of his cheek, wrote in The New York Times. “On average, United States companies had profits of $873,611 per person living in those islands.”

Such ridiculous numbers are merely a product of the process by which multinationals can–legally–reduce their U.S. taxes. Currently there is no significant movement on Capitol Hill to close any of the loopholes or change the laws that make these moves possible.

Why do taxpayers think the tax code is rigged in favor of large corporations? Maybe because it is.

Delta Airlines pays zero tax on $2.7 billion in earnings in 2013

When people have a bad financial year, they generally don’t get any tax benefit. But when corporations lose money, the losses don’t disappear. For tax purposes, they are carried forward to future years, and can result in companies making billions but still owing nothing.

Case in point: Delta Airlines, which, as Bloomberg Business Week explains, won’t owe anything on its $2.7 billion in earnings last year.

Delta isn’t doing anything special here–the ability to carry forward corporate losses is an ordinary and well-established feature of the tax code. And indeed, in some cases an individual taxpayer could have such a bad year that he would have a loss that could carry forward to another year.

Mitt Romney famously said on the campaign trail that corporations are people. What he didn’t explain is that they’re people who sometimes have better tax benefits than actual people.

When a candidate says what he really thinks . . . that’s news

“…who believe that they are entitled to health care, to food, to housing, to you-name-it.”

Wow. Won’t spend a lot of time on this, because it’s only been the #1 story of the week. Absolutely chilling to hear the world view of a man who believes that 47% of us are freeloaders. If you make too little to have an income tax bill–but you’re still paying Social Security, Medicare and other taxes–Mitt’s not going to lose any sleep over you.

As The New York Times said today,
“Mr. Romney has been trying to incite the anger of a small slice of the richest Americans who need no government assistance but get it anyway, against the working poor, older Americans, the disabled workers and veterans, and even a significant chunk of middle-class Americans.”

How amazing is it hearing what Romney says when he thinks only his friends are listening? Let’s just say I never thought I’d be linking in this blog to a political commentary by conservative favorite David Brooks.

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What’s Mitt got to hide? Part 2 of (what looks to be) a series . . .

Mitt Romney still won’t release any tax returns from before 2010. He now says, as The New York Times reported , “Every year, I’ve paid at least 13 percent.”

What does that mean?

Did he pay 13% of his adjusted gross income in taxes? (That’s income before your itemized deductions.)

Did he pay 13% of his taxable income? (That’s usually a far smaller number–your income after all your deductions.)

Did he pay 13% on $1 million of income? $10 million? $100 million?

Is he including any foreign tax payments for which he received a credit?

Is he lumping non-income taxes–like property taxes–into his 13% calculation?

How stunning might the Romney tax returns be that he’s willing to continue to take a drumbeat of criticism instead of releasing the returns?

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What to expect from the Ryan Administration

Mitt Romney will only release one year of past tax returns and won’t give any specific budget proposals. But sooner or later, he had to pick a vice-presidential candidate.

So we can now look to Paul Ryan’s proposals as chairman of the House Budget Committee (Romney previously called a proposed Ryan budget “excellent work”) for a preview of how your taxes could change under a Romney-Ryan Administration. Here’s some of what Ryan has proposed:

–Giving the top 1 percent of income earners a tax break averaging more than $150,000, while on average raising the taxes of the bottom 20%, as The Washington Post reported.

–Ending Medicare by giving beneficiaries a fixed amount to go into the marketplace and try to purchase private health insurance. Over time, government spending on health care would drop by 50% and most elderly would pay more for health care (if they can get insurance) than would otherwise be the case. You don’t have to believe me about this–just check out the report from the well-regarded and nonpartisan Congressional Budget Office.

–Privatizing Social Security, with a plan so radical that even privatization fan George W. Bush spurned it, according to New York magazine.

–Cutting Pell Grants, job training benefits, and food stamps with a slash-and-burn campaign so severe that the U.S. Conference of Catholic Bishops publicly criticized him.

I know–only one of the bullets above deal directly with taxes, while the other three deal with government spending on social programs. Remember: Whenever politicians talk about cutting spending on social programs, they are usually also talking about indirectly raising costs and reducing opportunities for millions of Americans.

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