Michael Bloomberg, Supporter of Tax Havens
While raising taxes in his city to cope with the economic crisis, the billionaire mayor of New York transferred millions of dollars from his foundation into offshore accounts.
Michael Bloomberg invested millions of dollars in his foundation via tax shelters. According to the New York Observer, the New York mayor’s foundation kept $400 million in offshore tax shelters, in Bermuda, Mauritius, the Cayman Islands, Cyprus and Luxembourg, among other places. The trick is simple: Go through the intermediary of tax shelters in order to invest in hedge funds. The foundation thus avoids the tax of 40 percent that applies to investments not directly linked to the mission of the charitable organization. There is nothing illegal about this operation which is widespread among large American foundations, such as the Rockefeller Foundation.
The transfers reportedly began in December 2007, when Bloomberg entrusted his investments to Quadrangle Asset Management. Incidentally, Steve Rattner, the manager of that firm, is currently the subject of an investigation by the New York attorney general for an affair involving public contracts.
What New Yorkers find hard to swallow is that while the mayor was busy getting his capital out of the country, he explained to them that in order to cope with the economic crisis, he was forced to raise taxes.
While Barack Obama pleaded on Thursday in New York for financial reform, Michael Bloomberg warned against excessive regulation of Wall Street. Since the crisis, the mayor has repeated incessantly that one shouldn't scare off the rich by taxing them too heavily. Apparently, he knows of what he speaks.
The billionaire justified himself on Thursday by declaring that his scheme made it possible to devote more money to the causes of his foundation.
Michael Bloomberg invested millions of dollars in his foundation via tax shelters. According to the New York Observer, the New York mayor’s foundation kept $400 million in offshore tax shelters, in Bermuda, Mauritius, the Cayman Islands, Cyprus and Luxembourg, among other places. The trick is simple: Go through the intermediary of tax shelters in order to invest in hedge funds. The foundation thus avoids the tax of 40 percent that applies to investments not directly linked to the mission of the charitable organization. There is nothing illegal about this operation which is widespread among large American foundations, such as the Rockefeller Foundation.
The transfers reportedly began in December 2007, when Bloomberg entrusted his investments to Quadrangle Asset Management. Incidentally, Steve Rattner, the manager of that firm, is currently the subject of an investigation by the New York attorney general for an affair involving public contracts.
What New Yorkers find hard to swallow is that while the mayor was busy getting his capital out of the country, he explained to them that in order to cope with the economic crisis, he was forced to raise taxes.
While Barack Obama pleaded on Thursday in New York for financial reform, Michael Bloomberg warned against excessive regulation of Wall Street. Since the crisis, the mayor has repeated incessantly that one shouldn't scare off the rich by taxing them too heavily. Apparently, he knows of what he speaks.
The billionaire justified himself on Thursday by declaring that his scheme made it possible to devote more money to the causes of his foundation.