Mitt Romney has served on the Board of Directors for Marriott International Inc. for 19 years – eleven of those he was on the audit committee and 6 of those he was the chairman of that committee. It is now known and the IRS has ruled that these tax maneuvers were simply tax avoidance schemes that helped propel Marriott’s tax burden to as low as 6.8% by using … wait for it … offshore tax havens in Luxembourg.
Does that remind you of anyone who is known for avoiding taxes by using offshore bank accounts including Luxembourg? I’ll give you a hint – his name rhymes with Mitt Romney. Romney used tax havens in Luxembourg to “rip off” Italian taxpayers (source). Romney used tax havens in Luxembourg and other countries to avoid taxes on his IRA which has amassed up to $100 million overseas (source). This guy LOVES Luxembourg tax havens.
Bloomberg News explains the “Son of BOSS” tax shelter that you’re going to be hearing a lot more about HERE:
During Romney’s tenure as a Marriott director, the company repeatedly utilized complex tax-avoidance maneuvers, prompting at least two tangles with the Internal Revenue Service, records show. In 1994, while he headed the audit committee, Marriott used a tax shelter known to attorneys by its nickname: “Son of BOSS.”
A federal appeals court invalidated the maneuver in a 2009 ruling, siding with the U.S. Department of Justice, which called Marriott’s transaction and attempted tax benefits “fictitious,” “artificial,” “spectral,” an “illusion” and a “scheme.” Marriott had argued the plan predated government efforts to close such shelters.
Employing another strategy, Marriott legally avoided hundreds of millions of dollars in income taxes thanks to a federal tax-credit program criticized and allowed to expire by Congress. Marriott has also shifted profits to a Luxembourg shell company. During Romney’s years on the board, Marriott’s effective tax rate dipped as low as 6.8 percent, compared with the federal corporate statutory rate of 35 percent.
And regarding that Luxembourg offshore tax shelter/tax avoidance scheme … Bloomberg notes:
The profit generated by the offshore unit is unclear because the page containing its income statement is missing for its only two public annual reports from 2009 and 2008, according to the Luxembourg corporate registry.
So Marriott channels all of these profits to Luxembourg to pay profits on their “foreign” profits in Luxembourg while stiffing the American taxpayer through LYING on their tax returns. And when it’s all said and done … the documents necessary to prove these profits in Luxembourg just went missing from PUBLIC annual reports. Well – that’s a coincidence. But they don’t call it lying or being dishonest – they simply regard it as being creative with your tax options but it wasn’t just creative – it was ILLEGAL and some people were prosecuted for their involvement in “Son of BOSS”.
CNN has this editorial on Romney and “Son of BOSS” HERE:
During that period, Marriott engaged in a series of complex and high-profile maneuvers, including “Son of Boss,” a notoriously abusive prepackaged tax shelter that investment banks and accounting firms marketed to corporations such as Marriott. In this respect, Marriott was in the vanguard of a then-emerging corporate tax shelter bubble that substantially undermined the entire corporate tax system.
Son of Boss and its related shelters represented perhaps the largest tax avoidance scheme in history, costing the U.S. many billions in lost corporate tax revenues. In response, the government initiated legal challenges that resulted in complete disallowance of the losses claimed by Marriott and other corporations.
In addition, the Son of Boss transaction was listed by the Internal Revenue Service as an abusive transaction, requiring specific disclosure and subject to heavy penalties. Statutory penalties were also made more stringent to deter future tax shelter activity. Finally, the government brought successful criminal prosecutions against a number of individuals involved in Son of Boss and related transactions not associated with Marriott, including principals at major law and accounting firms.
And stepping back from Mitt Romney’s connections to the largest tax avoidance scheme in history … let’s take a moment to look at the bigger picture. Corporations are abusing corporate loopholes put into law by politicians who have been bought lock, stock and barrel where their accountants show “losses” in the U.S. and “profits” overseas thus avoiding their taxes and lowering their tax bill. One problem for these corporations is that they can only maintain this scheme as long as they keep that money overseas; the moment they begin bringing it back state side to dispense to their shareholders in the form of big cash dividends (cha-ching) … they will be subject to U.S. tax law once again.
THUS – you might have heard about the “corporate tax holiday” that corporation after corporation after corporation is fully supporting in order to reduce their tax bill. As I wrote in “The Corporate Tax Code is a Big Clusterf#ck” … despite all of the rhetoric about America having the second highest corporate tax rate in the country …. that’s not true at all. It’s called DEDUCTIONS. No one pays the marginal rate. Nobody. And corporate taxes are moving further lower and lower every year:
And as I wrote HERE – we’ve tried this “tax holiday” in 2004 and it reduced revenues. Corporations and the conservative politicians will parrot these talking points that bringing some of this money home would be good. But – that’s akin to letting successful bank robbers off the hook and offering them amnesty if they’ll give you 10% of what they stole. Newsflash – not only is it lacking in any consistency or morality … that only incentivizes them to DO IT AGAIN.
The Center for Budget and Policy Priorities also found another corporate tax holiday:
…would cost the Treasury considerably more in later years, for a ten-year net revenue loss of $79 billion — 24 times the net projected cost of the 2004 tax holiday.
And all of this tax wrangling to screw the American taxpayer only further adding to the burden of the working class … was led by Mitt Romney with “Son of BOSS”.
Like us on Facebook?