Romney, former governor of Massachusetts and former head of Bain Capital investment group, refused to discuss his holdings outside the United States. That led President Obama’s reelection campaign and the national Democratic Party to pound away at Romney’s hidden wealth and his nonpayment of taxes on the money offshore.
But not even the reporters who delved into the issue understood just how pervasive such tax avoidance schemes have become.
Now, fortunately, through the efforts of the International Consortium of Investigative Journalists and the Washington Post, the veil of secrecy is being lifted. And what has been revealed is nothing short of financial piracy.
To be sure, American citizens are permitted to place their money in offshore accounts and in trusts in tax havens so long as they provide the Internal Revenue Service with the details. But the reality is that there are billions of dollars in secret accounts all over the world that the IRS knows nothing about.
The unpatriotic nature of such schemes, especially during a period of global economic dislocation, makes it incumbent upon the Obama administration to closely study the information revealed by the International Consortium of Investigative Journalists, a Washington, D.C.-based nonprofit news organization, and the Washington Post.
The consortium obtained 2.5 million records of more than 120,000 companies and trusts created by two offshore companies, according to the Post. The newspaper identified the companies as Commonwealth Trust Ltd. of British Virgin Islands and Portcillus TrustNet, which operates in Asia and the Cook Islands, a South Pacific nation.
Among the 4,000 U.S. individuals listed in the records, at least 30 are Americans accused in lawsuits or criminal cases of fraud, money laundering or other serious financial misconduct, according to the Post.
Therein lies the reason the federal government should launch an investigation into the offshore accounts and the trusts in tax havens. If current laws do no give the IRS and Justice Department the weapons needed to undertake this war against the scofflaws, Congress should step in.
As last year’s presidential election showed, law-abiding, honest Americans do not take kindly to their fellow citizens with the financial wherewithal not only taking full advantage of all the loopholes in tax laws, but completely avoiding their tax obligations by sending money offshore.
Democrats made much of the fact that the Republican nominee for president, Romney, not only had secret accounts abroad, but refused to provide any information about them. The Democratic controlled U.S. Senate should publicly support the crackdown, which will force the Republicans in Congress to take a stand.
The Washington Post noted that for the better part of a century, the United States has been trying to rein in the offshore world.
“Today, there are between 50 and 60 offshore financial centers around the world holding untold billions of dollars at a time of historic U.S. deficits and forced budget cuts,” the newspaper noted. “Groups that monitor tax issues estimate between $8 trillion and $32 trillion in private global wealth is parked offshore.”
For nearly three decades, Sen. Carl Levin, D-Mich., has been holding hearings and conducting investigations into the offshore world.
Levin should be able to garner greater support on Capitol Hill now that 2.5 billion records have been unveiled.