Earlier this year, I defended Mitt Romney and Bain Capital from the absurd accusation that they did something wrong by utilizing low-tax jurisdictions.
So-called tax havens, as I’ve explained on many occasions, play a valuable role in the world economy. Indeed, they should be emulated rather than persecuted.
In a follow-up post, I mocked ABC News for a ridiculous non-story as they tried to make Romney appear guilty for following good business practices.
The issue has become hot again, so I talked about Romney and tax havens with Jason Riley at the Wall Street Journal.
Since nobody has claimed that Romney violated U.S. tax law, this kerfuffle only exists because the left wants to create the impression that tax havens are bad and then tar the GOP’s presumptive nominee with guilt by association.
Brian Garst of the Center for Freedom and Prosperity nails the issue in his column for the Daily Caller.
People who invest or bank overseas do not hate America. Oftentimes, they are simply banking where their money is earned to avoid the hassle of exchange rate and wire transfer fees. …It’s also smart practice to diversify. …Mitt Romney should not be cowed into shame over his banking practices just because he doesn’t strictly park his after-tax earnings in American banks, but should instead seize the opportunity to more aggressively defend against populist attacks on financial privacy and explain the benefits of jurisdictional tax competition.
That’s good advice, but I’m not holding my breath waiting for Romney to defend Switzerland and other jurisdictions with good policy. That would require an underlying belief in freedom and liberty, which seems to be lacking.
But you would think that he might respond by noting that many top Democrats directly invest in tax havens, and that presumably all of them – as I noted in my WSJ interview – are indirectly invested in these financial centers.
P.S. It’s probably a lost cause, but I’m an old-fashioned guy who thinks that people shouldn’t blatantly lie, so here’s my obligatory complaint that many politicians, journalists, and policy folks are repeating the debunked assertion that so-called tax havens deprive the U.S. Treasury of $100 billion per year. Obama threw around that make-believe number in the 2008 campaign, as seen in this video. But as shown in the final video of this post, the $100 billion figure was concocted out of thin air by a former John Kerry staffer, who confessed he made up the number when the Congressional Research Service asked for his methodology.
What is wrong with the Romney camp? They are acting just like the McCain camp and just giving this election away. Have the Repubs. just lost their balls?Look’s like 4 more years of Oblamer if this keeps up.
Reblogged this on Talon's Point and commented:
Reblogged at Talon’s Point
Thanks for taking this on. His lack of openness is giving the ‘offshore account’ issue a bad name for the rest of us average middle class Americans living abroad who have these so called ‘evil accounts’ just to conduct normal life. Pity the poor American living and working in Switzerland, who now is having normal bank accounts closed because Americans have become toxic.
The issues that his accounts exposes, and he probably wants to avoid, is that our complex Tax Statutes as enacted by Congress do provide many special provisions that only the elite and their armies of Tax attorneys can take advantage of. They are specially designed for these so called ‘Tax Havens’. It smacks of ‘tax engineering’ and while it is not illegal, it does get conflated in the minds of voters just like the Wall Street CDO financial engineering or Libor manipulation that destroys trust in our institutions. That is the issue from my standpoint.
If the Dems wanted to really attack Romney on partisan grounds they should go after the FBAR and FATCA requirements. Has he filed those forms, which were created by Democratic Statutes? If so, shut up! He has followed the law.
Now that does not imply that I think anyone should be required to do these monsters, but it is the law of the land. They are destructive in many ways, as you know. Unfortunately for Americans abroad, what applies to the super rich elite like Romney living in the Homeland, also comes down hard the middle class guy like me living abroad with many Draconian non willful penalties for benign failures to comply.
BTW, and as an aside, there are two recent articles that merit readers attention on offshore issues. These are necessary posts in response to Democratic Congressional Statutes and IRS practices:
Tax Justice For Americans Abroad, by Steven J. Mopsick: http://bit.ly/PXJJJK
and
FATCA Form 8938: Demystifying the Complex Rules and Severe Consequences for Noncompliance by Hale Sheppard: http://bit.ly/LXAZ00
[...] the latest ignoble chapter in a long tradition of demagoguery [Matt Welch] More: Dan Mitchell. [...]
Reblogged this on Freedom from the tyranny of U.S. citizenship-based taxation for U.S. and dual citizens outside the U.S. and commented:
Dan:
Thanks for this incredible post and videos. Americans who still believe in “Life, Liberty and Pursuit of Happiness” need you and the CATO institute!
Offshore investing and banking has gotten a bad rap in the press. It has become associated with crime and tax evasion. However, in reality it is just a small part of global investing. Proper investing should know no borders…as long as its legal.
[...] Since Mitt Romney Won’t Defend Himself, I Guess It’s Up to Me to Debunk the Left’s Tax Haven D…. Share this:TwitterFacebookLinkedInStumbleUponEmailPrintLike this:LikeBe the first to like this. [...]
Here’s what bothers me about the Left’s criticism:
1) They like to paint it like the accounts international crime bosses might hold to hide their criminal income. The problem about that theory is we only know about it because Romney disclosed his tax documents. Compare this to Joe Biden who, along with his wife, has earned 5 million dollars over their lifetimes and report 250 thousand worth of assets. This is a guy who doesn’t drink and rode the train to work the whole time he was a senator. Nobody is asking if he’s hiding investments abroad.
2) Switzerland is a good place to invest money. They have much better monetary policy and the Swiss Franc has risen against the U.S. dollar considerably since Bush and Obama implemented their huge deficit spending strategies.
3) Betting against America? It’s not like there is some sort of World Series going on between Switzerland and the U.S, and Romney is going to Vegas and putting all his chips on the competition. It’s a tiny portion of a diversified portfolio. But lets say it is a bet against America. Maybe he sees the trends of Frank-Dodd, SarbOx, and FACTA and wanted a little slice of something safe if America slowly kills its own economy. In that case, he’s not betting against America as we’ve historically known it. He’s betting against the recent policy implemented by the people criticizing his move. They hate it so much because they’ve been trying to tell us it’s all good for business, and here is a guy who understands business casting his dollar votes. He’s putting his money where his mouth is and saying, “No. It’s not good for business. I can take my toys and leave your sandbox, too.”
4) Xenophobes like to have it both ways. Decades ago, the big complaint was the Asians were buying up all of America’s biggest properties and siphoning profits over to their countries. If that’s a real concern, then shouldn’t Romney be viewed as on some sort of victorious conquest to bring Swiss profits to the States?
5) Finally, there’s your biggest point in all your related blog entries and Cato postings. The Government needs competition. If some other government can thrive with business friendly laws, then people are going to do business there. It’s easy to dismiss the models of Bermuda and the Cayman Islands as tiny fake countries that can get by on tourism income and provide tax havens as hobbies. Switzerland is a real and functional economy supporting 8 million people and unemployment peaked at 4.4% in 2009. It’s a model we should be emulating instead of demonizing.
[...] John Kerry, John Edwards, Robert Rubin, Peter Orszag, and Richard Blumenthal. I’ve also discussed the issue for the Wall Street Journal’s online interview program, and I slammed ABC News for empty and biased reporting on the [...]
[...] Clinton, John Kerry, John Edwards, Robert Rubin, Peter Orszag, and Richard Blumenthal. I’ve also discussed the issue for the Wall Street Journal’s online interview program, and I slammed ABC News for empty and biased reporting on the [...]
[...] Romney for doing exactly the same thing as Jack Lew. And now the White House is pointing out the same thing I pointed out about Romney – that there is nothing illegal, immoral, or unethical about investing in a place that has [...]