Uproar About Offshore Tax Havens


by Stephanie Berenbaum – September 10th, 2012

Do Your Taxes Need A Getaway?

If you’ve been following the presidential election even a tiny bit, there’s one phrase you’ve probably heard time and time again: “Offshore Tax Haven.” And you don’t need a set of tax calculators to know that we taxpayers are getting the short end of the stick. If you think it sounds like something out of Lifestyles of the Rich and Famous, well – you’re right!  So much has been made of Mitt Romney’s use of offshore tax havens to guard his money – but is it really much ado about nothing?

What is an Offshore Tax Haven?

What is an offshore tax haven, anyway? Basically, there are many countries (the Cayman Islands, for example) which offer very low taxes and extreme privacy.  During this election, Mitt Romney has been painted as a tax dodger who did something unsavory by using these tax havens.  The issue: though legal, the US government reportedly loses billions of dollars per year in tax revenue due to these offshore accounts…

Ethical Dilemma

Full disclosure – I am not a fan of Mitt Romney.  But I do find all the slams against him for using tax shelters puzzling, since we all do things to make our tax liability as low as possible.  So is the issue really whether the Romneys should have taken advantage of a legal tax haven – or if these offshore tax havens should be legal in the first place?

What Would YOU Do?

So, Fab & Fru wants to know: if you were in the position of being uber-rich, would you turn down the use of offshore tax shelters because you feel it is unethical, even though it is not illegal?  Since many are in essence saying that is what the Romneys should have done, I am wondering how many of us would do it if we were in their position? Let us know what YOU would do!

 

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4 Responses to “Uproar About Offshore Tax Havens”

  1. Molly says:

    Everyone, INCLUDING the Obama’s takes advantage of every tax law they can so to pay as few taxes as possible.

    There’s no doubt in my mind that the Obama’s tax return’s would also show tax loopholes that many would find equally as objectionable, whether it’s offshore accounts, or ridiculous legal deductions.

    The gang up on the Romney’s, while the Obama’s are “just folks” like you and me is ridiculous. Just as last week after the Dem Nat’l convention people lauded Michelle for being like “one of us” and wearing a $400. dress while Romney’s wife wore a $2000.00 dress. Funny thing is no one found it odd that Michelle Obama chose to wear a dress made in China, while talking about putting Americans back to work. It obviously never crossed her mind that there are pretty dresses made in America too. Also, while they applauded her for being down to earth in her affordable dress, they ignored the $10,000. earrings she was wearing.

    Trust me, the Obama has lots of money legally hidden away, and neither he nor Romney broke any laws in their dealings. If you don’t like it, demand tax reform, but you can’t cry foul when someone pays less taxes and follows the laws.

    All I know that that gas went from $1.81 when Obama took office (which he referred to as unacceptable when Bush was in office) to the $3.65 it is now (but now says we have to get used to it).
    My medical coverage has gone up 30%, and my taxes are higher.

    If Romney can do a better job w/ the economy – and you can’t do any worse than Obama – then where he legally puts his money isn’t my concern. Yes, I want tax reform because I don’t believe in these offshore tax havens, but it’s not right to single out one person like that when Obama is doing the same thing.

  2. Jen says:

    I disagree with your premise that offshore tax havens are legal.
    Though promoters of offshore schemes often advance technical arguments, which purport to show that their scheme is legal, the intent of Congress remains clear. U.S. taxpayers are not to be allowed to evade taxes by shifting their own liability to some foreign entity.

    http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Abusive-Offshore-Tax-Avoidance-Schemes—Talking-Points

    • Jen says:

      By the way, I mean no disrespect by this comment. I love your site and read it frequently though I rarely throw my 2 cents in. I’m not a tax expert so I could be wrong. Keep up the good work and asking the questions that make us think!

  3. Mimi says:

    I see your point and yes, I would because that is sound financial intelligence. However, with the country in the shambles it is in economically, perhaps something should be done about these legal tax havens. The reason why I can say this confidently is because I am not rich! If I were, I am sure I would feel differently. :)

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