I suppose it should come as no surprise that the self-described “member of the ‘0.01%’ ” and current Illinois Republican gubernatorial candidate Bruce Rauner has diverted some of his considerable fortune (estimated at $1,000,000,000, that’s Billion with a B) to the tax-free haven of the Cayman Islands. I mean, you’re really not among the “0.01%” in this country if you’re foolish enough to keep your money on-shore.
If you're wealthy and you know it clap your hands . . .
After all, you managed to make your money the old-fashioned, American way, by entering a field with completely rigged compensation and tax rules (hey, 2 and 20 baby, all as capital gains, it's good work if you can get it). So moving your money to a tax-free haven like the Cayman Islands is insurance that the Socialist in the White House won’t be giving any of it away to that lazy 47% base! Mittens knew it. And so do you Bruce, so do you.
As I read this Sun-Times’ article Friday a few questions ran through my mind (admittedly lots of room for them to run through). And I hope that a few of the people from the Great State of Illinois (stop snickering non-residents!) read this and ask the same questions.
First, there’s the usual “he’s done nothing illegal” bleats from the campaign. You know, the usual stuff about how the candidate pays his fair share and all. Maybe so, but . . .
. . . Rauner’s campaign stresses he is no tax-dodger.
“Bruce has disclosed all this information to the federal government and is clearly in full compliance . . .”
Yes, yes, clearly you’re within the letter of the law. But it’s still not right, just legal. There's only one reason to move investments to the Cayman Islands and everyone knows the reason. And besides, everybody knows that everybody’s doing it, so that makes it A-OK in the Rauner/Romney Cookbook of Haute Tax Cuisine. Remember, as Leona Helmsley once said, "Only the little people pay taxes."
Forget the fact that most of those tax-free Cayman Island games sport a $500K to $1M ante to play, and forget that the disclosure laws make it sound like Monopoly money (“. . . having at least $5,000 worth of stock holdings or deriving $1,200 or more in dividends. . .”, why, it sounds positively penurious). It’s done all the time, nothing to see here, move right along.
Hey, do you remember when "Tone Def" Bruce (that's his rapper name, dude) thought it would be a good idea to lower the minimum wage in Illinois to attract business? And do you remember how fast he sprinted that one back? Yea, I think this Cayman Islands thing might be part of the reason why. Serendipity can be a bitch, man!
And then there’s this bit about GTCR, the company Rauner ran and recently retired from to pursue the governor’s office.
“GTCR creates offshore subsidiary funds when investing in non-U.S. companies,” Schrimpf told the Chicago Sun-Times.
“Doing so helps fulfill fiduciary duties to state pension funds and other investors.”
OK, so I’m no tax lawyer, but maybe a tax lawyer will answer me this. Please explain to me why incorporating an investment fund for investment in non-U.S. companies in a tax-free haven like the Cayman Islands is so helpful in fulfilling fiduciary duties? You can't fulfill those duties if you're incorporated here? Yup, I figured you still could.
Or is it that GTCR is a huge manager of state and public pension funds, and that incorporating non-U.S. investment funds in the tax-free haven of the Cayman Islands keeps the pools separated? Doesn't separate incorporation here achieve the same goal? Yup, I figured it did.
Are the investment funds for investment in non-U.S. companies that are not incorporated in tax-free havens not fulfilling their fiduciary duties, or perhaps not fulfilling them as completely or as rigorously? Is it fiduciary duty to make sure clients pay no taxes? Yup, I figured it wasn't fiduciary, just expedient (ex·pe·di·ent - adjective - (of an action) - convenient and practical, although possibly improper or immoral).
Another thing that frosts my cookies (not from the article, just in general) is that GTCR has profited for years from managing Illinois pension funds, and that managing this money, for some reason, makes Rauner eminently qualified to “fix” our "broken" pension system. That’s like the Pritzker family’s money manager claiming that, because he managed the Pritzker’s money, he knows how to turn that Dysfunction Junction into the Ward Cleaver family!
Get ready for disappointment, Bruce! You of all people should know better, since you've been playing in that sandbox since 1993. Good luck gettin' that bunch to play nice together! Your kung-fu must be very powerful, Grasshopper!
In the end, I have one question. Just once, could one of these guys do the right thing, instead of just the bare-minimum-necessary-to-meet-the-legal-requirements thing? Bring your money home and pay taxes like us little people. Your brand might be a whole lot more palatable.
Yea, I'll be bringin' all my money straight home to you . . .
There was a time in this country when, even if you were filthy rich, it was unseemly to appear filthy rich (think early Warren Buffett). Maybe it was from the shock of seeing the merely paper-rich evaporate during the Great Depression. Seems like those days are gone. Now we get defensive when people question our off-shore wealth while we're trying to take retirement away from the working class.
[/end rant]
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