Mitt Romney (photo, Gage Skidmore / Wikipedia)
GENEVA, SWITZERLAND – US Presidential candidate Mitt Romney, whose estimated net worth is $190-250 million, has made public more than 500 pages of tax records after losing the South Carolina primary over the weekend to Newt Gingrich, who accused the former financial investment manager of not coming clean about his wealth. It is the first-ever disclosure by Romney, even though he earlier served as governor of Massachusetts.
Media reaction today in the US to details of the Romney fortune and the couple’s tax record mentions financial accounts in the Cayman Islands and in Switzerland, but focuses on the fact that he is one of the wealthiest candidates ever for the top US office. The Caucas, a New York Times blog, notes that “The Wall Street Journal and financial wire services showed a vast array of investments from a recently closed Swiss Bank account to holdings in Bermuda to the Cayman Islands, all underscoring the breadth and depth of his wealth.”
The disclosure and debate over it are part of growing evidence that a hot presidential campaign topic will be fiscal reform and the disparity between what the rich and other people pay in taxes.
State of the Union address Tuesday night may focus on economic inequality
President Barack Obama will give his State of the Union speech tonight and, according to CBS News, “Economic inequality is emerging as a central theme in the battle for the White House, with Obama trying to harness populist anger at Wall Street and corporations against a backdrop of chronically high unemployment. He plans to call for higher taxes on millionaires in his State of the Union address to Congress on Tuesday night, embracing an idea advanced by billionaire investor Warren Buffett and Occupy Wall Street protesters.”
Media references to the Swiss bank account are generally limited to implying that it is an indication of his wealth and noting that it was closed at the suggestion of political advisors. CBS News reports that “in a conference call with reporters, Brad Malt, Romney’s trustee, called the Swiss account ‘fully legal, fully disclosed’ but said it was closed in early 2010. He added: ‘The income earned on that account is taxed just as any other domestic or other bank account owned by the blind trust.’”
The news channel goes on to note that “pages and pages are devoted to foreign entities in which Romney is invested. Many are located in places like Luxembourg, Ireland and the Cayman Islands, all famous tax havens. None shows much income.”
Reuters, in an article widely picked up, writes 24 January, that “the emerging picture was of a man of great means who contributes mightily to charity. The documents showed he and his wife contributed $7 million in charity over the two years, much of it going to his Mormon church. That represents more than 15 percent of the Romneys’ income for those years”, more than the tax rate paid by the Romneys, with an
GENEVA, SWITZERLAND – It’s not the first time super-investor Warren Buffett has said the US government should stop giving so many tax breaks to the rich, but his op-ed piece published by the New York Times Monday 15 August had a special impact because of the crisis over the spiraling US government debt. Buffett’s suggestion that Americans with $1 million should be taxed at a higher rate was welcomed by President Barack Obama, whose popularity rating has sunk to new lows in the wake of the news 5 August that credit rating agency Moody’s had downgraded US government securities.
Warren argues that the $7 million he paid in personal income tax, about 17 percent, was the lowest rate of anyone in his office.
Links to other sites: Buffett’s op-ed, CNN, New York Times editorial on Buffett’s remarks
Geneva, Switzerland (GenevaLunch) - World media have been celebrating International Women’s Day for much of the week, with stories about the progress made by women in the past 100 years, particularly in politics and economically. But women are conspicuously small in numbers on Forbes latest list of the world’s rich. You have to move beyond the first 10 to find a woman, and most of those in the top 20 are from the same US family, the Waltons of Walmart fame. Birgit Rausing, whose money comes from Tetra Laval, is described by Forbes as “living quietly in Switzerland”. She is part of a very small group of wealthy women whose money has almost always been inherited, the magazine notes, while men who have made their fortunes do so in family businesses to a much smaller extent.
Warren Buffett, the world’s second richest man, is paying $26 billion through his Berkshire Hathaway company for the Burlington Northern Santa Fe Corp. The purchase price is 31.5 percent over the closing price of the company’s stock Monday 2 November. It is Buffett’s largest ever acquisition and will likely lead to the sale of some of his other holdings, US media are reporting. The deal is a departure from Berkshire Hathaway’s tradition of cash purchases. “Our country’s future prosperity depends on its having an efficient and well-maintained rail system,” Buffett says in a company press release. ,”Conversely, America must grow and prosper for railroads to do well.”
Links to other sites: Berkshire-Hathaway, Bloomberg, Reuters
Warren Buffett, IMD in Lausanne, 2008
The investment crowd loves Warren Buffett and in criticizing his own mistakes during the past year in his annual newsletter, published 28 February, he may be the rare head of a holding company who will be appreciated rather than reviled by his investors. The New York Times details his mea culpas, but also his anger at some parts of the business world, as his company, Berkshire Hathaway, “reported a 62 percent drop in net income for 2008 and posted negative results for only the second time since he took control in 1965. Warren Buffett’s letters to shareholders, including 2008, published 28 February.
Zurich, Switzerland (GenevaLunch) - The world’s largest re-insurance company, Swiss Re, lost CHF1 billion in 2008, unaudited figures published 5 February shows. Shares immediately nose-dived 17% in Zurich trading. Swiss Re released its figures early after its shares fell in recent days.
Markets around the world reacted positively to the news that Warren Buffett’s Berkshire Hathaway investment firm is buying a $5 billion stake in Goldman Sachs.Reuters The deal gives him an “instant paper profit of $435 million,” reports Bloomberg.
Mega-investor Warren Buffett five years ago warned that financial derivatives were a “time bomb” waiting to go off and he ordered the insurance branch of his company, Berkshire Hathaway, to get out of the business, reports Reuters. The original story: BBC, March 2003, Buffett told Fortune magazine that such contracts were devised by “madmen.” Commentary, 16 September, Bloomberg
