John McCain: Mitt Romney Tax Returns Show He Paid Uncle Sam (VIDEO)

The article discusses nine additional troubling aspects of the Romney returns that have been put on view, and they are instructive and pointed. For instance, finance people always refer to the manage participation in fund profits as a “carried interest”. But as Sheppard stresses, the IRS calls that a “profits interest” and they have specific valuation rules. And she is clearly not happy with how the popular press missed the real issue with Bain’s use of Cayman Islands investment vehicles:

Private equity. Issue: Cayman residence of funds.

The places where some of Bain Capital’s numerous private equity funds are organized — Bermuda and the Cayman Islands — are tax havens. The widespread use of tax and banking havens by large U.S. multinationals and investment funds as an escape hatch from U.S. tax, banking, and securities laws, while offensive, is tolerated and even encouraged by U.S. law and administrative practice.

Mainstream newspapers howl that Romney has assets in the Caymans, but the reality is worse. Bain Capital invests in the United States and other countries, including China, but it organizes its funds in the Caymans to keep investor lists secret while availing itself of British corporate law. Every other investment fund does the same thing.

The practical effect of Cayman registration is that if investors were of a mind to lie to their home governments about the existence of or income from their Bain investments, the secrecy of investor lists makes it easier to do so. As the Romney campaign pointed out, all these investors still owe tax to their home governments (including the U.S. government) on their Bain income.

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Read the Article at HuffingtonPost