Burch: Mitt Romney’s $101M Cayman Island IRAs

Friday, April 27, 2012 at 12:11am
By Michael R. Burch

Tennesseans will soon have to make a very important choice: who will make the better president, Barack Obama or Mitt Romney? After four years we have a pretty good idea of who Barack Obama is and what he stands for. But appearances and organizational skills aside, Mitt Romney is hard to figure.

Romney certainly looks presidential, but if we tear our eyes away from his impressively coiffed figure and actually listen to his words, he sounds like a robot programmed to mindlessly drone the standard Republican mantras: “Everything bad that ever happened to Americans is the fault of Barack Hussein Obama, and if you elect me I will wave my magic wand and fix everything my first day in office, by repealing this, that and the other piece of legislation.”

Like most robots, Romney seems to lack empathy for and a connection with human beings. He is certainly no Ronald Reagan. While he’s not as creepy as Richard Nixon, he seems perhaps even more weirdly remote and alien. Take, for example, his remark that “I’m not concerned about the very poor. We have a safety net there. If it needs a repair, I’ll fix it. I’m not concerned about the very rich; they’re doing just fine.” He seems to somehow equate the very poor and the very rich. Even Nixon wouldn’t have made that mistake.

Romney also opined that his speaking fees of $374,327 last year were “not very much.” Last June, he told a group of unemployed Floridians that he shared their plight, saying: “I’m also unemployed. I’m networking. I have my sight on a particular job.” If he was trying to be funny, the joke fell flat.

At a debate, he offered to bet Rick Perry $10,000 — an amount that, however facetious, reminded voters just how rich and carefree Romney is.

But nothing I’ve heard said by or about Mitt Romney holds a candle to his $101 million in Cayman Island IRAs. It seems possible that he may have sheltered all or most of his Bain Capital wealth from taxes by putting it into an offshore “IRA” and only allowing it to be valued correctly once the appreciation was protected from taxes. If there is some other reasonable explanation for how anyone’s IRA can be so huge, when contributions are limited to a few thousand dollars per year, I’d like to hear it.

I first became suspicious about Romney’s finances when he started squirming like a fish out of water when he was asked about releasing his tax returns during a debate. Then later something in a Huffington Post article caught my eye, because a single Bain fund was valued at $5 million to $25 million, and yet was called only “part” of his IRA. So I started trying to determine what Romney’s full IRA amounted to. Here’s an excerpt from a Reuters report I found, dated Jan. 23, 2012:

“In the wake of news reports last week that presidential contender Mitt Romney owns an individual retirement account worth as much as $101 million, questions are growing over how it could have gotten so big when contribution limits are capped at $5,000 or $6,000 a year. Tax lawyers and accountants suggest an answer: Romney may have made use of an Internal Revenue Service loophole that allows investors to undervalue interests in investment partnerships when first putting them into an IRA. These assets can produce returns far in excess of those that could be generated from other investments made at the capped level. An investor could even set an initial value for a partnership interest at zero dollars, because under tax regulations an interest in a partnership represents future income, not current value.”

Romney's IRA has been valued at between $20.7 million and $101.6 million, as reported by The Wall Street Journal.  It holds stakes in 13 investment entities run by Bain Capital, Romney’s private-equity firm.

“One possibility for its size is that he put his Bain partnership interests into the IRA and valued them at a very low number,” said David Weisbach, a law professor who specializes in taxes at the University of Chicago Law School.

The average IRA held by Americans holds $42,500, so Romney’s seems outrageously large. His IRA produced income of $1.5 million to $8.5 million between 2010 and 2011, according to his financial summary, so it seems quite possible that the IRA may be closer to the high-end estimate of $101.6 million.

Romney’s total wealth has been estimated at around $200 million. If he shielded half his money from all taxes, that would seem to drop his effective tax rate from around 14% to around 7%. And that would explain why he looked like a fish out of water when he was asked about disclosing his tax returns. In this case, I suspect that two plus two probably results in four ... as in four more years for President Barack Obama.

Michael R. Burch is a Nashville-based editor and publisher of Holocaust poetry and other “things literary” at www.thehypertexts.com.

149 Comments on this post:

By: BenDover on 4/27/12 at 8:03

That's a no, I think slacker.

By: BenDover on 4/27/12 at 8:07

You do know you're just piling on rationalizations to bolster your core bias, don't you Moonglow?

By: MusicCity615 on 4/27/12 at 8:07

Mike Burch-

you're scared, and in your fear, you resort to what you only know - scare tactics.

"Republicans want to hurt women...." for example. Ludicrous.

My vote is going for Mitt Romney and the reason is clear. Everything Mitt Romney has done in his career has been a success. His private sector career, his management of the insolvent winter olympics, and his term as Mass. governor (where 97% of residents had health insurance under his watch).

Barack Obama is a great speaker, and I do feel he is very sympathetic, but sympathy does not translate to a competent leader. The nation's deficit has increased by 5 TRILLION under Obama in 3 YEARS!!!!!! You can say that Bush's policies lead him to spend in such a way." that's complete BS.

Bush was a terrible president, but he never stuck a gun to Obama's head and forced him to spend 5 TRILLION dollars in 3 years. Bush managed to spend $4 trillion in 8 years, which is horrible, but makes Obama look even worse.

I want a president who has a track record of managing a business and a record of governing a state. Barrack Obama had zero track record, appealed to many because he was young and hip, etc. but at some point your competency catches up with you...

who wants to be $11 TRILLION in debt 4 years from now? Will it still be Bush's fault?

By: Moonglow1 on 4/27/12 at 8:07

Moonglow1: And Ben, how exactly is Obama spending your money? Is it the way in which he is giving huge tax benefits to General Electric, Exxon Mobile, or is it for all the extra clean up work required in the Gulf from the BP oil spill and death of 15 workers. Is it from the health care costs due to contaminated food produced by corporations that provide you with pink slime to eat or salmonella infested eggs.

By: Loner on 4/27/12 at 8:09

Slack:

Mitt went on an LDS mission to France during the Vietnam War....a classic draft-dodging move.

Some used student deferments...some got married and fathered kids to avoid the draft...Dick Cheney used both commonly used tactics.

Others got Medical Deferments...Rush Limbaugh apparently used that old trick, according to sources.

Joining the clergy could get one a deferment and a few other schemes were used....some faked homosexuality.....or insanity......some could and some did claim a criminal record, in order to avoid conscription.

Some split for Canada....and paid the price for that choice...they are held in general contempt.

All in all, Mitt's type of draft-dodging is especially egregious, IMHO.

By: BenDover on 4/27/12 at 8:12

Don't forget Obama also blew all the repayments of the TARP money that Bush used to prevent a run on the banks, MC615. That should have netted down around $400Billion more against the deficit but it just got sucked up into the rest of Obama's spending.

By: Moonglow1 on 4/27/12 at 8:14

Moonglow1: And Ben what is your core bias? Your rationalizations? IMO Romney is a flawed candidate, but of the "brain trust"-Perry, Gingrich, Bachmann, he's all you got. You're stuck with him.

By: slacker on 4/27/12 at 8:16

Loner, Mitt went to France, to supply pants, to those poor women in the southern region.
The man's a hero.

By: Loner on 4/27/12 at 8:20

Yogi wrote: ". Volunteers is what our services have been composed of since shorty after WWII."

Is that right? Tell that to the tens of thousands who were drafted for the Korean and Vietnam Wars. Yogi pulls his facts out of his @ss?

I have disclosed all the details of my service in the US Army that need to be revealed...I served honorably from Nov 67- Nov 69....that's a fact...my old outfit is having a reunion in June...I plan to attend....my old buddies sought me out....that speaks volumes, doesn't it?

By: Kosh III on 4/27/12 at 8:20

We are missing the point:
"contribution limits are capped at $5,000 or $6,000 a year. Tax lawyers and accountants suggest an answer: Romney may have made use of an Internal Revenue Service loophole"

One (lax) standard for the rich and powerful who can afford to buy special rights; one (strict) standard for the rest of us.

By: govskeptic on 4/27/12 at 8:21

This BS about military service of either of these candidates is so
immaterial to today's circumstances, it only serves as another of
many distracting to serious problems! One candidate has spent
over half his life in academia and tried about 2 cases as a lawyer
along with registering a few folks to vote. The other has spent
many years building a business. solving problems!. and raising
a large family! There's the choice!

By: Kosh III on 4/27/12 at 8:23

Just to keep the record straight: I turned 18 the year the draft lottery was instituted; my number was 364 so I didn't have to serve in LBJ's war.
In 1964 I was at a LBJ campaign rally; he said "I'm not going to send our boys 10,000 miles overseas to fight somebody else's war." This was AFTER the fake Gulf of Tonkin incident.
I've been a cynic ever since.

By: bfra on 4/27/12 at 8:23

KoshIII - If you check the site I posted earlier, it tell some of how Romney has beat taxes.

By: Loner on 4/27/12 at 8:23

"Obama's spending"? Ben is raving mad?

Last I knew, Congress spends the money, not the Executive Branch...or is that only when a Republican President has to work with a Democratic Congress?

The Tea Party infused GOP is running Congress, Ben...blame those spendthrifts, not the POTUS.

Benjamin, my old friend, come to your senses, man.

By: BenDover on 4/27/12 at 8:25

My core bias was the same as yours moonglow; care.

I've matured enough to see now that providing direct care through an inefficient, often corrupt and politically motivated bureaucracy is a flawed system; so I expanded my world view to consider other types of systems that provide best for our fellow man. I discovered that the capital economy and free markets serve this purpose far better than giving the government power to deprive one group of people their earnings at gun-point so it can buy favor with another group.

In short I don't equate justice with equality anymore I equate justice with equal opportunity and a system of work/reward. I do this because without such a system there is no surplus upon which we can cover necessary government and altruistic overhead.

By: MusicCity615 on 4/27/12 at 8:27

Mike Burch-

What do you think of these two articles. Are they Bush's fault? Romney's fault? Is this acceptable for America??

http://www.cnbc.com/id/47202822

http://www.dailymail.co.uk/news/article-2135914/Michelle-Obamas-Spanish-vacation-cost-taxpayers-500-000.html

By: Loner on 4/27/12 at 8:28

Slack: I have been to France...yes they do wear pants...Mitt was selling magic underwear.....the French like a thong, not boxers and bloomers....it was a tough sell...but it beat dodging bullets in 'nam....he honed his sales skills while on that mission....he's pretty slick in that department.

By: dargent7 on 4/27/12 at 8:31

If there's any wonder why America is in the shitter, read this day's posted crap.
Romney's dad was BORN IN MEXICO and the resident "5150" says that qualifies him as being born from "natural born citizens". How's that math work out?
Grandpa was born in Mexico, also.
It doesn't get any more clear-cut.
RACIST.

By: frodo on 4/27/12 at 8:31

So Romney used his brains and personal drive to make wealth for himself. And no he doesn't send a tingle up your leg. But this isn't American Idol, folks. I recall when Bill and Hill first geared up their 365, 24/7, eight-year campaign, they said it was about the economy and about issues. Of course later it was "just about sex." But I digress. BHO is currently driving the bus, and from the back seat allotted to people of my philosophy (yes, elections have consequences), I see the front wheels of this bus very close to the edge of a cliff. BHO says, "Elect me and it is pedal to the metal." Why would I not be for Romney? This election will have profound consequences, one way or the other. Again, this is not American Idol.

BTW, Loner, we get some insight today in why you think the way you do...you mother said everyone who has money is a crook (paraphrasing). Some of us were raised to believe most people got most of their wealth by working hard. It is no wonder we have honest differences of opinion.

By: BenDover on 4/27/12 at 8:35

Yeah... you're right about congress there Loner to a large degree. Reid and Pelosi inherited the gavels back in '06 if I remember right and they engaged in a huge expansion of the government bureaucracy and entitlements; especially during that left-wing syzygy after Obama's correnation during the populist political orgy of 2008-2010.

The one group who has tried to put the brakes on this is the Republican House elected in '10 but they have been thwarted with the label 'obstructionists' at every move, by a pundit and political class that doesn't seem to know that compromise requires the participation of the President and the Senate as well as the representatives of the people who were sent up there to put a stop to that unbridled government expansion.

By: dargent7 on 4/27/12 at 8:38

"Romney used his brains and talent..." You idiots better warm up to the fact he's like a "Kennedy".
Money, wealth, power, control....for 4 generations.
He's not "self-made". He inherited it.
His dad was President of a car co.
Was Gov.
Was a Secretary of HUD.
The Romneys were always "hooked-up" from the word, GO!
Let's us all vote for another GW Bush who owned a baseball team, was a cocaine addict, a drunk with 3 DUI's, and daddy was an Ambassador.
Wake up!

By: frodo on 4/27/12 at 8:44

Dargent, even is your jaded characterization of Romney is accurate (it is not), he still looks a lot better to me than the BHO crowd. That is how very dangerous BHO looks to me.

By: Loner on 4/27/12 at 8:46

I see, Ben, the Democratic-controlled Congress elected in 2006 gets all the blame...the GOP-controlled Congress elected in 2008 gets all the credit.

And whenever a Democratic President is forced to work with a GOP-controlled Congress, all blame is upon the Democrat in the White House.

And whenever a Republican president gets to work with a Republican Congress, the blame for the deficit spending, the foolish wars and government expansion is still the fault of the Democrats....that's your story...and you're sticking with it....I got it now.

By: frodo on 4/27/12 at 8:48

BTW, Dargent, Romney's money is not inherited. What his father gave him, he gave away.

By: slacker on 4/27/12 at 8:51

Exactly, to provide pants to those poor women in southern France.
The guy's a Mensch. No offense loner.

By: BenDover on 4/27/12 at 8:51

Anyway, so what if Romney's rich. Are we saying Obama is wrong for taking every tax loophole and advantage he could?

In a sensible world we wouldn't have 100,000 pages of arcane cronyistic tax laws that seek to drive our behavior and serve as barriers to entry to people who don't have a staff of lawyers and accountants. And we'd have a corporate tax structure that was simple and of a comparable rate with the rest of the civilized world.

Since when is being rich something to be ashamed of? What the hell's happened to this country? Most people aspire to be wealthy and secure.

By: Moonglow1 on 4/27/12 at 8:53

Moonglow1: Frodo, I agree we were also taught to work hard to get ahead in life. So we did. I do believe that the very wealthy (greater than $10 mil) make their own rules and have options that the rest of us do not have. As an example, I cannot employ a lobbyist to help influence legislation which would be favorable to my business. Or I cannot profit off the wars. But Halliburton can, thus the wealth made by Cheney. Willard had similar perks and loopholes which enabled his business to thrive.
One needs more than hard work these days to make real money. You need government policies that serve your interests. The deal today is multinationals control Congress at your expense. I read today that US multinationals created 300,000 jobs OUTSIDE the USA and 100,000 here. So where is the love...

You think social security is an "entitlement. " I worked to earn that money which was a sizable chunk each month. So the deck is stacked against "the common man. "

Do you really think Romney worked that hard? Do you think he would serve us well in international diplomacy? A diplomate he is not! He views the world in venture capital terms. Buy at rock bottom rates, re-structure, sometimes raid the company, leverage, and sell off. How is that model useful in a President?

By: slacker on 4/27/12 at 8:57

Ben, best point made today, revise the tax code.
Maybe consider the ''Fair tax?''

By: MusicCity615 on 4/27/12 at 9:01

moonglow,

do you think barrack obama doesn't have lobbyists???

By: BenDover on 4/27/12 at 9:02

I'm just drawing the time-line there for you loner. Our senate is over 1000 days since they've passed a budget and the leadership likes it that way. They don't want accountability they want to keep spending $1,000,000,000,000+ in deficits over trend because the bigger government gets the bigger the democratic power base.

The republicans are the only ones objecting to this and they get their hands slapped and get labeled 'obstructionists' at every turn in a game where a non-compromising senate and a non-compromising President share in none of the blame.

You see it your way, I'll see it mine. I'll say potato you'll say POT-ato ...

By: Kosh III on 4/27/12 at 9:03

Abolish the capital gains tax and IRS

Have a national sales tax no exemptions including services and sales of stock. Each time (for example) a share of IBM is traded: sales tax, lawyer services: sales tax, accountant: sales tax, house purchase: sales tax etc &etc

By: Loner on 4/27/12 at 9:06

As far as my dear departed momma's adage about great fortunes and great crimes going hand in hand, let me just say that her grandparents were all born in Eastern Europe....they brought their justifiable cynicism with them...my mom actually said that back in 1960, when JFK ran against Nixon...she was referring to Joe Kennedy and his rum-running, bootlegging past....but mom was no alcohol-free snob, she just stated some unvarnished facts.....she never liked Nixon...she voted for JFK.

My dad's side of the family goes back to colonial times...his attitudes, beliefs and politics were quite different than my mom's...I heard some great political chatter when I grew up...my parents got involved.

By: Mike Burch on 4/27/12 at 9:08

Everyone,

Thanks for taking the time to read the article and comment. As I've pointed out before, I was a Reagan Republican, so I'm not someone who mindlessly and unfairly singles out Republicans. I left the Republican party because I could see that it was being led down a very dark path toward racism, sexism, homophobia and warmongering by religious fanatics, rednecks and special interest groups like the NRA and the pro-Israel lobby, which seems intent on using US soldiers to take out its enemies in the Middle East, with the US getting nothing in return but the enmity of the Muslim world and trillions in debt.

President Obama is not perfect, and I disagree especially with his reliance on our military, drones, night raids and covert ops to further US interests abroad. I agree with Ron Paul that we would be much better off overseas to save our money and soldier's lives. But Obama at least has reasonable goals. The goals of the GOP are no longer reasonable, and if one's goals are insane, it is impossible to make progress in a better direction.

So I am voting for President Obama and Democrats until the GOP returns to sanity. Not because I have any special fondness for the Democratic party, but because as a thinking person right now I have no choice.

By: BenDover on 4/27/12 at 9:08

I like Fair Tax ... but I think a flat % of income would be more advisable... something with a basic standard deduction for necessities and then a flat rate after that would do wonders for society. If you ever really want to get control over the government you can't have half the people paying nothing in federal taxes. As long a minority of voters are the only ones paying substantial federal income taxes there will never be any pressure to do anything but expand government and since they have the power to both borrow and print money on our line of credit we are looking at a 'bubble' there that will make the housing bubble look like a grain of sand by comparison when the day of reckoning comes.

By: Loner on 4/27/12 at 9:11

More like a "slime line" than a "time line", Ben.....we will continue to disagree....on that we agree.

By: Loner on 4/27/12 at 9:14

Great article, Mike...thanks for doing the work.

By: frodo on 4/27/12 at 9:15

Article of trivial consequence, Mike...could you please focus on real issues.

By: yogiman on 4/27/12 at 9:16

Moonglow1,

What kind of experience did Obama have to use it to make his "model" to be president?

And I would also suggest you look back and notice who was president when the jobs started moving overseas so rapidly.

By: Loner on 4/27/12 at 9:18

...a thumbs up followed by a quick towel-snap...THWACK!!....that's the unenviable life of a freelance journalist in Nashville, TN, today.

By: Loner on 4/27/12 at 9:21

Hey, Frodo...just curious...what sort of a list of "real issues" have you compiled...in order of importance, if possible....thanks....you got the floor, you little towel-snapper....

By: yogiman on 4/27/12 at 9:29

Sorry to inform you, Mike, but Obama is in that office illegally. His main goal is to bankrupt this nation and place us under martial law.

It he reaches that goal this year, or wins the election by fault again, you can forget about voting, he will become your dictator. I'm nuts? Okay, let's see what happens in the next 7 months.

You also keep blaming the Republican party for "its" fault as though the Democrats don't have any. Boy, did you get hooked!

You had better be more concerned why congress allowed someone to take the Presidency knowing they weren't legally eligible for that office unless you went all the way into communism when you left the Republican party.

By: brrrrk on 4/27/12 at 9:30

Loner said

"Romney made mountains of money....by using other people's money...I reckon that qualifies him to lead the most powerful nation on the planet.....he knows how to redistribute the wealth...no doubt about that."

As the old saying goes, capitalism can only exist by underpaying labor.

By: MusicCity615 on 4/27/12 at 9:31

Mike at some point you have to realize that a goal is meaningless unless you have a plan to achieve those goals.

you always talk about the "religious fanatatics" here in America, but you oppose drones to stop the taliban/al quaeda who favor flying planes into our buildings and killing thousands of innocent people. At least American tries not to kill innocent civilians, the taliban does not.

you are a sympathetic person, I respect that, but at some point you have to be realisitic and look at a president's resume, not his political party, before voting for him.

If I were employing 1 person and had the resumes of BHO and MR, MR would without a doubt be hired. Who cares how rich the person is.. it's about who has the most work experience and who can solve problems.

MR worked in private equity for goodness sakes!! Their objective is to look at companeis with great potential but very poor management and turn them around, and he was extremely successful in it!!!

BHO can say I want to do this or that, but he has ZERO exeperience in it. If MR was a democrate and BHO was a republican, you would vote for MR. you are being prejudice to the republican party simply because they declare themselves republicans... isn't that something you preach not to do??

wake up

By: Loner on 4/27/12 at 9:32

We know that Mitt Romney is a bona fide draft-dodger; but is he also a high-rolling tax-dodger too? That's relevant, isn't it?

Mitt is a question-dodger too...but all politicians are.

Mike Burch has given us food for thought on a relevant issue, guys like Frodo & Yogi just snap their verbal towels, like knuckleheads in high school gym class.

I strongly suspect that Mitt Romney is a Dodgers fan....he certainly is whenever he's in LA....but if and when he's in Brooklyn, you know he'll call for the Dodgers to return there.....Mitt's Mister Flipster.....(try to say that 3 times quickly).

By: Moonglow1 on 4/27/12 at 9:33

Moonglow1: As info, the only "people" not paying taxes are the multinationals of which our friend Willard has so eloquently stated, "Corporations are People Too!!"

I don't know anyone (except corporate "people") that do not pay their taxes. And they certainly pay more than Willard pays. "Normal" people cannot contribute more than a percentage of income capped at around 4k in their 401K, and a few thou more if you are over 50 (to catch up). In fact, if you are a "highly paid employee" there are stringent regulations for the percentage of allowed contributions. So as you can see, the very wealthy enact laws so that they can legislate loop holes for themselves and that "the masses" do not have available to them.

By: BenDover on 4/27/12 at 9:37

Loner, you old stick in the mud. Trying to take the wind out of Frodo's sails and send him off on a goose-chase of tedium to produce a long list of 'relevant' issues that you will no doubt discount, and at worst, try to use some fragment of which to try to discredit the salient point that Obama is using wedge politics to slice, divide, and balkanize the nation so that he can continue his $1,500,000,000,000+ a year assault on our grandchildren's future.

By: govskeptic on 4/27/12 at 9:39

This tired ole line of "I was a Regan Supporter, but now I've become so
enlightened" and now support the Democratic Party and President
Obama seems a very far stretch to this reader. The return of some kind
of economic reality prior to the G.W. and Obama silly war years sure sounds
like a change I can believe in. Most of these cliches been thrown around
are as phony as the"facts" from Media Matters!

By: BenDover on 4/27/12 at 9:41

Culture of corruption -- here you go moonglow:

http://www.politico.com/politico44/2012/01/white-house-staffers-owe-more-than-in-back-taxes-112412.html

By: Loner on 4/27/12 at 9:43

Yogi's 10:29 post made no sense...until I got some tin foil and fashioned a skullcap out of it and placed it on my head.....now, I see the wisdom of the Yogi Master.....Obama is a USURPER! GIT A ROPE....GET SOME TAR....GET SOME FEATHERS....

wHOAH! Whoah!.........WTF.....don't try that at home kids....I'm OK now....smoking a doob...gimme a few minutes...I'll be OK....whoah, that was effin' WEIRD....I'm crushing that tin-foil "helmet" right now.....in the recycling bin with it.

They ought to pass a federal law banning the sale of tin foil...think of the CHILDREN!

By: BenDover on 4/27/12 at 9:46

That Reagan canard did not resonate well with me either, gov; but I've got no basis to dismiss except that it makes no sense. Reagan was was a full-on social conservative as well as a fiscal conservative. They made the same kinds of criticisms about his views on abortion and religion back when he was running that they claim are the reasons to not go with Romney now.