Mitt Romney’s history as a business magnate was supposed to be one of his best assets going into the election. Early on the GOP’s messaging that a successful businessman would be the best choice to lead us out of economic disaster seemed like an easy sell. But it hasn’t gone that way for Mitt—recent polls show his enormous personal wealth has alienated him from voters, who feel Mitt can’t understand their problems.
As it turns out, there’s a lot more of that wealth which, until now, voters haven’t even known about.
The Romney campaign has consistently stated Mitt is worth $250 million. But a new report in Bloomberg concerning Romney’s fancy finances reveals there’s at least another $100 million that the campaign omits from this figure. Even more problematic, the extra $100 million is set up as a tax-free shelter for his heirs.
Romney’s effective income tax rate in 2011 was about 14 percent. He has also enhanced his family’s wealth by moving assets worth $100 million into a trust while taking steps to avoid paying any gift taxes. The trust’s value isn’t counted in the $250 million that his campaign cites as Romney’s net worth.
Here’s how the trust works: it allowed Romney to dedicate shares in ad company DoubleClick to his heirs before the company went public, when the shares were technically worth nothing or very little. Less than a year later the company had gone public, Google had bought it for $3.2 billion, and Romney was able to sell those shares at a 1,000% profit, pay the relatively low capital gains tax on the profit himself, and avoid paying a gift tax altogether. Romney did the same with hedge funds, interests in Bain Capital funds, etc. There is no tax liability to his kids, who will inherit the $100 million-plus dollar fund with no tax liability whatsoever.
So not only is Romney actually worth at least $100 million more than we thought he was worth, that $100 million is sequestered in an IDGT trust for the express purpose of avoiding taxes.
This can’t sit well alongside Romney’s recent damning words for the supposed 47% who don’t pay income tax—that they think they’re “victims” and that they’re “dependent on government” for their financial well-being.
Somewhat hilariously, Bloomberg points out that the IDGT trust, “a more powerful driver of wealth transfer in estate planning than almost anything else,” is hence nicknamed the “I Dig It” trust. Can’t you just picture Mitt with his tax attorney siphoning off one of his hundreds of millions to be sequestered as a tax-free trust for his kids, while staying off the books of his personal wealth—”Ha ha, I dig it,” he’d say. Must be nice.