Will Offshore Tax Havens Be the Bane of Mitt Romney's Candidacy?

Cayman National Bank

For the first time in American political history, the issue of a presidential candidate's offshore bank accounts has emerged into mainstream consideration. Mitt Romney's campaign is already tarred with innuendo that the presumptive GOP presidential candidate's fortune has benefitted from considerable asset allocation into Swiss and Cayman Island banks. His stance on the issue is essentially to dismiss it, ignore it, and discuss how his business acumen may help the nation.

Unfortunately for Romney, capital flight into offshore havens is a growing, and very dirty, issue. It's no secret that Bain Capital's founder and most significant senior management figure made zillions during his tenure at the firm. He probably approved what most extremely wealthy people throughout the world do: they park the money in offshore accounts. The most significant plays in this case are tax avoidance and secrecy.

Romney knows he is in elite company. According to a report in today's online editions of The Observer, the offshore economy can now be measured in the trillions of dollars.  (It wasn't so long ago that a billion dollars was a profound amount of money. How times have changed!) The wealth transfer is simply staggering. The Observer article asserts the amount of offshore money equals the combined GDP of the United States and Japan.

The impact of this flight of wealth is a bi-level global society in which the super-rich, oligarchs, kleptocracy bosses, gangsters, and powerful politicians dodge tax payments while everyone else is left holding the bill for their nations' well-being. With countries in various forms of financial extremis, those keen to rule democratic societies will have to explain how moving personal wealth to offshore accounts positively impacts the country they desire to serve.

Clearly, this angle will be a tough sell for Romney. No wonder Bain Capital's former boss might very well view offshore tax havens as the bane of his political ambitions.