So, Mitt’s campaign claims that he paid the same US taxes on his Cayman Islands accounts as he would have, had they actually been located in the US.
And — I hope you’re sitting down — this may well not be true. Reports the Wall Street Journal (the news part, the part that Paul Gigot & co never read):
However, tax experts said that had Mr. Romney’s IRA invested in Bain funds in the U.S., he would likely have been forced to pay an obscure levy called the “unrelated business income tax,” also known as UBIT.
This tax, assessed for individuals at a maximum 35% rate, is meant to discourage tax-exempt entities such as an IRA or college endowment fund from unfairly competing with for-profit, taxpaying entities by operating a business without paying taxes on it. Investing in a partnership such as a Bain Capital fund that uses debt to buy companies would trigger the tax, experts said.
For this reason, the experts said, it is very common for private-equity funds such as Bain to set up vehicles in offshore locales such as the Cayman Islands. Such a structure allows American tax-exempt entities, including IRAs, to avoid paying UBIT.
I mean … just ask the simple question: If he’s paying the same in taxes, why is it located off-shore, in a “notorious tax haven” — the world’s money laundromat, preferred by drug kingpins and gangsters around the globe? What’s the point otherwise? Maybe someone can enlighten me.