January 20, 2012

MEGAN MCARDLE: So What About Romney’s Offshore Tax Havens?

So the story-of-the-week seems to be Mitt Romney’s off-shore investments. I am deeply confused by the reporting. Either that, or the reporters are. . . .

Most of the writing I’ve seen today about this seems to be confusing the Cayman’s role as an offshore tax haven, and its other role as a headquarters for hedge funds. They are not entirely unrelated, but they are also not the same thing. Cayman, and a lot of other islands, became tax havens because they wouldn’t tell your government if you had money there. It’s not because there is some special tax break for investing there.

If the investments are showing up on Romney’s tax return, then they are definitionally not this sort of tax haven.

Plus, from the comments: “People seem to be thinking that Romney’s tax returns can be demagogued because adhering to our current tax law will make anyone look shifty and incoherent because the law is so complex and incoherent.”

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