In his Vanity Fair piece Mitt Romney’s Offshore Accounts, Tax Loopholes, and Mysterious I.R.A., Nicholas Shaxson discusses offshore tax havens and something not a lot of Americans know: America is also an offshore tax haven for foreign money:
“Little noticed in the academic discussions of financialization is the role of offshore tax havens, one of the big reasons the financial sector has become so powerful. In 1966, Michael Hudson, a young Chase Manhattan balance-of-payments economist, was in a company elevator when he was handed a memo by a former State Department operative. The memo came from the U.S. government, and Hudson was tasked with figuring out how much foreign money the U.S. might attract. “They were saying, ‘We want to replace Switzerland,’ ” Hudson explains. “All this money will come here if we make this the criminal center of the world. We wanted foreign criminal money, which was patriotic, but not American criminal money.”
“In the years since then, almost unknown to most Americans, the United States has turned itself into a giant tax haven for foreigners, just as the memo suggested. Federal and state tax laws have been deliberately shaped to give foreigners special tax exemptions unavailable to Americans, plus financial secrecy and exemptions from regulatory restraints. “We have criticized offshore tax havens for their secrecy and lack of transparency,” said Senator Carl Levin. “But look what is going on in our own backyard.”
“In this grand scenario, tax havens such as the Caymans serve as feeders of foreign savings into Tax Haven U.S.A. from abroad, providing foreign investors with additional ways to skip around tax, disclosure, and regulatory requirements that they might trigger if they invested directly.
“The money sucked into Tax Haven U.S.A., often via the “feeder” tax havens, is frequently tax-evading and other criminal foreign money, in the spirit of Hudson’s 1966 memo, and it is predominantly channeled not into productive investment but into real estate and financial business.”
Does this imply that if an American quarter-billionaire can get his wealth into foreign off-shore accounts, he can funnel it back into America with “special tax exemptions,” because it’s been magically transformed into foreign money. I guess that’s how the one percent launder their money, pay little or no federal tax, and call themselves patriots.
Mitt Romney wants your vote — he just doesn’t want to tell you how much he’s really worth or where he keeps all his money.
barackobama: Mitt Romney’s campaign slogan may be “Believe in America,” but he’s chosen to invest his money in offshore tax havens like Bermuda and the Cayman Islands.