Category Archives: Mitt Romney

The Comedian, The Prime Minister and Mitt Romney

Jimmy Carr for those that don’t know is very successful and talented British comedian, he appears regularly on British TV and radio, his tours fill very large theatre venues  and he sells hundreds of thousands of DVDs in the United Kingdom.

Mr Carr has found his tax affairs the subject of much media speculation, it appears that he has been using a perfectly legal but somewhat morally questionable tax avoidance scheme which involves his earnings being transferred to Jersey, one of the Channel Islands and outside of United Kingdom tax legislation  and then returned to him in the form of a loan, because Mr Carr’s income comes in the form of a loan it is not subject to UK income taxation and he therefore avoids paying tax.

I’m not going to defend Mr Carr, I find these kind of arrangements absolutely morally wrong,  however Mr Carr is entitled to do what he can to reduce his tax liability within the law, moreover this scheme was probably devised for him by an accountant and Mr Carr may not have had any knowledge of the how scheme works or even how much tax he was saving.  He is after all a comedian and not tax accountant or business manager, Mr Carr is incredibly successful and one would presume that he has someone who deals with these things for him.

My real problem with this is the reaction of British Prime Minister David Cameron, in an interview with the UK’s Channel 4 News David Cameron described these schemes as “Morally Wrong” and yet has done absolutely nothing to close the loopholes in UK taxation legislation which allow these tax avoidance schemes to operate. David Cameron is in control of British parliamentary process if he feels so strongly about this then surely he can move to make these schemes illegal.  David Cameron singled out in Mr Carr a single UK taxpayer and yet didn’t  mention his many supporters in business and finance that use schemes similar to this in order to avoid tax. His moral outrage is absolutely disingenuous, he knew very well that these schemes existed and that many of his donors use them and has chosen to do nothing at all about this except criticise a comedian that doesn’t support his government.

What does this have to do with Mitt Romney?

Mitt Romney is the first US Presidential candidate that has refused to publish his tax records, by his own admission he has paid a lower marginal rate of taxation that the average middle class American. It is absolutely essential that the US electorate know what measures for tax avoidance a presidential candidate has taken, if Mr Romney has taken measures to off-shore his wealth in order to avoid US taxation or used similar schemes to the one used by Jimmy Carr then that is something the electorate need to be aware of.

Mitt Romney has made great play of his financial success in business, claiming this to be a qualification for the office of President Of The United States, so why shouldn’t his tax records be the subject of public scrutiny? And why shouldn’t he answer questions about his business career at Bain Capital?  Mitt Romney has something of a track record on avoiding difficult questions, during the Republican primaries he made great statements of his Mormon faith and now he is the candidate for the party he is refusing to answer any questions about his faith. If Mitt Romney wants to be taken seriously as a candidate then he must be open to scrutiny especially when it comes to the things he declares as his qualifications for the office.

How The Rich Become Super-Rich

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So Daddy did well in business and left you a couple of hundred million dollars, but rather than lie on beach earning five percent you really fancy joining the ranks of the billionaire super-rich, well this is how you do it, it’s risk free, totally safe and guaranteed to make you super wealthy. Follow my step by guide and you too can be enjoying the billionaire lifestyle, be hailed as a hero of capitalism and a real master of the universe.

  • Set up an holding company through which to start your enterprise, we shall call ours Rand Capital Investments, you might want to register it in a tax haven such as the Caymen Islands, Jersey, Switzerland or Monaco.
  • Transfer your personal assets to Rand Capital Investments, you will now be able to use those assets to leverage finance for a company purchase, if you have assets of $200 million you will be able to raise up to $2 billion in capital from the banks. Unlike ordinary people in business you wont be struggling to raise finance, you are already rich.
  • Find a company that is asset rich but struggling for either cash flow, turnover or market share and buy it using your $2 billion of leveraged capital.
  • Transfer the debt taken on in the purchase from Rand Capital Investments to the company you’ve purchased, clearing Rand Capital Investments debts. Charge the company a large consultancy fee for arranging the transfer of debt. This will not only make you money but will reduce the companies tax liability. And you still own the company!
  • Sell off the profitable divisions of the company, reducing the company’s debts and improving the balance sheet, for each sale charge the company a large consultancy fee. If you use the revenue from the sell off to reduce company debt this avoids the need to pay tax.
  • Now you are left with just loss making divisions it is time to sell the remainder of the company, the best buyer is obviously the company’s own pension scheme who will want to buy the company to try and save their own jobs.

Congratulations, you’ve turned your $200 million into $2 billion and because you had the foresight to register Rand Capital Investments in a tax haven you don’t have to pay tax.

Sadly this is the way that capitalism works, it is risk free, your strategy doesn’t depend on being able to turn a company around and create new business, it is simply about making your money work for you, it is 100% legal moreover it is openly encouraged by American, Australian, European and British governments.

That’s Capitalism Folks!

 

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