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.