Sen. Carl Levin (D-MI) says Mitt Romney will have to make his pre-2010 tax returns available. That may sound like a predictable demand from a partisan Democrat. But it’s more than that.
Levin may well know more about tax avoidance strategies than anybody in Congress. In his capacity as the Democrats’ top investigator he’s has made extensive inquiries into the techniques businesses and individuals use, including overseas havens, to hide their money from the IRS. And what Romney’s revealed so far troubles him.
“I saw in the paper this morning that the spokesperson for the Romney campaign said that it was just an ‘ordinary’ bank account in Switzerland,” Levin told reporters at a Christian Science Monitor breakfast round table, referring to the revelation that the Romney family held a Swiss bank account in his wife’s name from 2003 until 2010.
“Folks, we’ve done a lot of research. We went after UBS in my subcommittee. We have seen abuses by American wealthy folks trying to hide from Uncle Sam, putting their money in Swiss bank accounts and bank accounts in other tax havens,” Levin said. “There was a period when the IRS said ‘OK, come on in, pay your taxes on your Swiss accounts, and you won’t have to pay any penalty.’ Thirty-three thousand people, I believe, showed up in the last couple years to pay their taxes…. And the spokesperson for the Romney campaign says it was just an ordinary bank account in Switzerland that Mrs. Romney had. There is no such thing as an ordinary Swiss bank account. Now, there may be a few exceptions where you’ve got Americans who are living in Switzerland who have bank accounts, but as far as I know, Mrs. Romney was not living in Switzerland.”
Levin also raised the issue of the carried interest loophole — a strategy Romney has exploited to avoid millions a year in taxation. Whether in the context of the fight over the payroll tax cut, or later in this session of Congress, Levin and other prominent Democrats plan to make closing the carried interest loophole a major legislative priority.
“My brother [House Dems’ top tax guy Sandy Levin] is working on the language and I expect that somebody on the Finance Committee in the Senate or one of the conferees in the Senate will do something in terms of carried interest, and if they don’t I will,” Levin said. “I’ll introduce my brother’s bill when he finalizes it.”
Nearly all tax experts agree that hedge and private equity fund managers should have to count their “carried interest” — their take in profits of the firms they manage — as wage income. But a loophole in the tax code allows them to treat it as long-term capital gains, and thus pay a significantly lower tax rate on it. This loophole is the key reason Romney’s tax rate is so low. And Levin thinks the confluence of public outrage at inequity in the tax code, combined with Romney’s prominence, will create a groundswell in support for closing this and other loopholes that overwhelmingly benefit the wealthiest Americans.
“This will be, in the middle of this year … there’s a sea change going on, and that is now the Republicans who ideologically have stood against any revenue are not going to be able to withstand the onslaught of the public outcry against the use of tax loopholes in the code, the tax havens that have been used to avoid paying taxes, the fact that corporations are given deductions for stock options in amounts far larger than they show on their books,” Levin said. “People’s eyes glaze over when you talk that way — until now. And now, because of Romney’s situation, there’s going to be a real focus.”
Brian Beutler
Brian Beutler is TPM's senior congressional reporter. Since 2009, he's led coverage of health care reform, Wall Street reform, taxes, the GOP budget, the government shutdown fight, and the debt limit fight. He can be reached at brian@talkingpointsmemo.com.
Democrats who make mistakes on their taxes and later correct them are considered corrupt.
Repiglicans who cheat on their taxes are considered good businessmen.
Levin may well know more about tax avoidance strategies than anybody in Congress
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That's a pretty low bar
The only reason I want Romney to win the nomination is because this tax avoidance and offshoring issue becomes a top priority. Romney will be exposed for the tax cheat he is. Under close scrutiny, I believe his actions will be deemed suspect and will be charged with tax evasion.
The whole notion of "trickle down economics" fails when the rich engage in this type of behavior. Frankly, the middle class is tired of getting pissed on.
If his actions are all legal, they are still deplorable. Just because something is legal doesn't make it "right". The general public is not going to like what they discover about Romney. And the Republican establishment is going to get punished for nominating someone completely detached from the average American.
Ask any Republican. Most aren't saying "well, I have two great guys to choose from this primary season - it's so tough, who should it be?". The are saying "which one sucks less?"
Roy Lawson Any contest between an ordinary person and a multi-billion dollar company is one sided. That's why we need a government that protects our interests. What we have now is a government that uses corrupt tax code to transfer money upwards.
That's my senator! Go get 'im, Carl!
Sen Levin is correct..Would also like a light to shine on 'carried interest' that allow romney to give his children $100 million tax free!
The more we know about Mr. Romney the more he is ethically and morally challenged! But up to the line legal..maybe!!!
whimkey And the reality is, he is just a normal rich guy. They hire lawyers and accountants to get them every possible tax break, then brag about it over drinks at the club. It matters not whether they have more than they or their families can possibly spend. What matters is how much they can keep, and if getting more means sending your job to China and hiding the extra profit in Bermuda, so what? Your job is not their priority. A healthy America is not their priority. A strong middle class? Who cares?
m3man2002whimkey Romney is the Leona Helmsley of Repub candidates.
whimkey The light also need to shined on the fact that Bain and similar firms have aggressively lobbied to create and preserve these loopholes. Romney claimed that he is ethically in the right because he paid what the law demanded. He did not point out that he and his cronies are instrumental in writing these laws.
"There is no such thing as an ordinary Swiss bank account."
And Carl Levin is one Senate investigator you don't want to go up against.
Maybe Carl should prove to everyone he' not a congressional inside trader, and if not who is. Clean up your own house first Captain Carl.
alaric You are committing a logical fallacy with that statement. Levin doesn't have to prove anything to anyone. For the purpose of his argument his own status is irrelevant. He doesn't have to be "clean" to accuse someone else of not being "clean". We may not like it, but that's a fact. The fallacy is called Ad Hominem, or attack on a person, by the way.
Victoria Barmakalaric If one must be clean before one accuses others, I guess e'll never hear from Newt again.
alaric
I like the use of the word "first."
This means that the Michigan Senator must get *your* unobtainable approval before he is allowed to do his work. But more than that, you know, it's the ambient assumption you make that the other commenters on these boards are *totally stupid* that is arresting, such that that we might take seriously the utterly inane malarkey you post. Naturally I realize that the mean IQ on Red State may not be too high so it is perhaps not embarrassing to you to post complete stupidities on such sites, but you are dealing with a different crowd here.
OverreachTHIS alaric Methinks you should define "ambient" for him, first.
alaric Where is your evidence that his house is not clean?
Wealth Sanctuaries: the best free-range money that money can buy. Vote Mittens, 2012.
Oh please, Carl--shut your yap. If you start attacking him, GOP voters will rally to his defense. Personally, I kinda like Gingrich as the nominee.
Not only is Willard the Vulture not going to be president, he's actually going to unwittingly lead the charge for real tax reform. Go Mr. Clueless!
Personally, I find it "fishy" enough that my household pays nearly 4% more in taxes than a guy with a net worth of freaking 250 million dollars.
closetcommie You only pay 4% more, well aren't you lucky, I pay 26% more and make about 250% less than Mittens.....
Zora Reneeclosetcommie Fishy?
Sorry, Charlie, but I get slammed every year.
closetcommie Is that in all taxes or just "Form 1040 tax"? You need to include FICA for it to really be comparable. Mitt, of course, paid NO FICA tax, since he doesn't have any wages.
HarryBowmanclosetcommie Exactly, I pay 15% just with FICA and state taxes. Yeesh!
I guess Romney's offshore banking is his only foreign policy experience so the GOP will spin it as a plus.
KQuark Hey, it's at least as good as "I can see Russia from my house!"
slbKQuark I'm a North California liberal Yankee living in Georgia, does that mean I have "foreign policy" experience too?
davidasrslbKQuark And not just foreign policy but also diplomatic corps. creds. (witness the fact that you're still alive and able to access a computer). You should apply for a position at the State Department.
KQuark Yes, I fear that soon flying to Switzerland to attend a swingers party will be a requirement for advancement within republican political circles.
KQuark Well, he lived in a mansion in Paris, too, as a missionary. That can be "overseas experience."
OverreachTHISKQuark those "missions" crack me up. Kids like little Mittens never seem to get sent to Moosejaw do they?
The funniest thing I ever heard was that the Mormons were very excited back in 2003 about Iraq becoming open to their "missions" after the Iraqis opened up their society following the invasion. You know, the flowers and chocolates thing.
I wonder how many of their "missionaries" actually went to Iraq to show those deluded Islamists the error of their ways....
Sure Gingrich's baggage makes him unelectable but by the end of the general election people will find Romney unelectable in these times as well. He was a bad governor with 47th job growth in MA and left with approval ratings in the mid thirties. Americans hate a phony, especially a phony who only wants to be president to enrich himself and his cronies. I really have no idea what the GOP establishment was thinking when they started pushing this faux person as a serious candidate for president.
KQuark Can you see Mitt Romney giving the go-ahead for a risky rescue mission the way Obama did just the other day? No, his reaction would be, "I have a State of the Union Address to give, for pete's sake! I can't risk having a rescue mission blow up in my face!"
slbKQuark Whether he has the ability to make that kind of decision or not, I certainly can't see him rushing to get out of the Chamber just to call Jessica Buchanan's parents to let them know she was safe.
If he made the decision to send the SEAL team in, it would be purely for ratings and ego. And I'm not sure he'd risk either of those things for 1 American and 1 "Other".
slbKQuark Exactly! He would never be that cool.
The United Bank of Switzerland, where Mitt stashed over $3 million between 2003 - 2010, was fined $100 Million dollars in 2004 for funneling money to Iran terrorists.
Read:
VDARE1 Oooops, Mitt!
But then the GOP has long had a loving relationship with those guys since the Iran-Contra days....
Thanks for this link. I learned a lot.
Thanks for the link. I learned a lot.
Sheesh! So a nice strip and burn .0006 percenter-capitalist (that's smaller than 1% of 1%, right?) who wants to run on his record of creating millions of jobs CAN NOT catch a break?
MarinCoUSA
it's 185,000 people (give or take)
MarinCoUSA
jeesh ... that just doesn't sound right ... altho that's the "math" (310mil x .0006) ... can't be that that many people are worth 200mil ... maybe .000006 ... that would be 1850 people and not, incidently would be that kind of mistake people usually make when expressing a percentage ... comments, anyone???
imhereagainMarinCoUSA In income terms, the data doesn't really exist to judge it. The threshold for the top 0.01% (15,000 households) was around $8 million a year, which he meets easily. Those 15,000 househholds "earned" over 5% of all income in 2008. The average is much higher than the mean, which means that the distribution of income within those 15,000 households is highly uneven, with a small fraction of them making most of the income. The threshold for this group gone down since then, but I haven't seen a post-crash update of the stats from Piketty and Saez.
What is still amazing to me is that he has had SIX years to work this out, and yet he seems like he just heard of this yesterday.
Everytime he opens his mouth, he makes the situation worse.
Doesn't he have professionals on his campaign staff that are supposed to advise him on this?
Not that I am upset, but talk about not being ready for prime time.
marconickolas It looks very much to me that Romney, like a lot of CEO types, surrounds himself with people who think exactly like he does. And, in any case, it's been clear since 2006 that Republicans aren't even equipped to grasp how out of touch they've become. 2010 exacerbated the problem for them because they mobilized the people who think like they do and genuinely believed those people are representative of the America that votes in presidential election years.
NCSteve 3.0marconickolas Couldn't agree more: this has to be the root of their problems. They still think the label "CEO" outshines all others in attracting people.
marconickolas It appears his investments were truly held in a blind trust and his accountants were working the tax code to the best of their ability for his benefit. You can bet Romney knew EXACTLY what his effective tax rate was when he made the statement, "It's probably closer to the 15%".
Doremus Jessup 2.0
But then why has he handled this whole thing so badly?
He should have known the last time he ran for prez that this would come out, and how to effectively deal with it.
marconickolas If the Republicans in congress had agreed to let the Bush tax cuts expire in 2010 this probably wouldn't be as big an issue. I can't believe they didn't see this coming.
Is Senator Cornyn R-TX's Pathfinder UBS account a 'regular' account.
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