n an effort to score political points, Democrats are pounding Mitt
Romney over his use of offshore bank accounts. Over the weekend, Senate
Majority Whip Dick Durbin remarked, “You either get a Swiss bank account
to conceal what you’re doing, or you believe the Swiss franc is
stronger than the American dollar.” DNC Chairwoman Debbie Wasserman
Schultz recently wondered aloud, “Why does an American businessman need a
Swiss bank account and secretive investments like that?” Maryland
Governor Martin O’Malley even called Romney’s Swiss bank account a “bet
against America.” These attacks reek of populist nonsense tinged with
more than a little economic xenophobia.
Contrary to the dominant rhetoric on display, overseas banking is not a crime. People who invest or bank overseas do not hate America. Oftentimes, they are simply banking where their money is earned to avoid the hassle of exchange rate and wire transfer fees. In today’s global economy, earning money in multiple currencies is hardly uncommon.
It’s also smart practice to diversify. Few if any of these critical Democrats lack their own overseas investments for just this reason. But regardless of his specific motivations, Mitt Romney should not be cowed into shame over his banking practices just because he doesn’t strictly park his after-tax earnings in American banks, but should instead seize the opportunity to more aggressively defend against populist attacks on financial privacy and explain the benefits of jurisdictional tax competition.
Contrary to the dominant rhetoric on display, overseas banking is not a crime. People who invest or bank overseas do not hate America. Oftentimes, they are simply banking where their money is earned to avoid the hassle of exchange rate and wire transfer fees. In today’s global economy, earning money in multiple currencies is hardly uncommon.
It’s also smart practice to diversify. Few if any of these critical Democrats lack their own overseas investments for just this reason. But regardless of his specific motivations, Mitt Romney should not be cowed into shame over his banking practices just because he doesn’t strictly park his after-tax earnings in American banks, but should instead seize the opportunity to more aggressively defend against populist attacks on financial privacy and explain the benefits of jurisdictional tax competition.
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