Not so long ago, having offshore investments was a bad thing. Throughout the 2012 campaign, Barack Obama pummeled Mitt Romney for his successful career at Bain Capital. He was derided as an outsourcer, a shipper of jobs to Mexico and a tax dodger with tax shelters in the Cayman Islands. Worst of all, Mr. Romney's offshore investments were "bets against America."
Jacob J. Lew was Mr. Obama's top White House aide when the president said those things, and now he's the president's choice to replace Timothy F. Geithner as Treasury secretary. During confirmation hearings on Wednesday, Republican senators questioned Mr. Lew about his investment of $56,000 in a Citigroup venture-capital fund registered in the Cayman Islands. This particular fund was registered at a building called Ugland House, a five-story structure where thousands of business firms have headquarters -- a practice the president has condemned on a number of occasions. "I've said before, either this is the largest building in the world or the largest tax scam," Mr. Obama said in 2009. "And I think the American people know which it is: The kind of tax scam that we need to end." Mr. Lew pointed out that he "paid all taxes due."
By Democratic logic, investments of this sort disqualified Mr. Romney from the presidency, but they're not a barrier to Mr. Lew's oversight of U.S. tax policy, a position where he would be responsible for plugging tax loopholes. Nor is the administration concerned about the $945,000 bonus that Mr. Lew took during his brief stint as a top executive at Citigroup, which received billions of dollars in government bailout money. Such payouts once inspired leftists to "occupy" Wall Street, but the mob has dispersed and there was no outcry from the left against Mr. Lew. Neither were the tigers of the left bothered by the fact that Mr. Lew's deputy at the Office of Management and Budget, Jeff Zients, began his career at Bain and Company, the parent of Bain Capital. Mr. Obama once sneered that Bain, co-founded by Mitt Romney, was a haven for corporate raiders responsible for 14,000 layoffs that stole pensions from workers and caused the death of an employee.
It's no surprise that both Mr. Romney and Mr. Lew took advantage of every legal avenue to protect their earnings. The problem isn't tax shelters, but the size and scope of a government that forces entrepreneurs to seek such shelters. It's the unnecessary complexity of the tax code that rewards those who can afford accountants who know all the tricks. None of this is likely to be enough to put Mr. Lew's confirmation in jeopardy. Considering that he has survived the process three times for his prior roles in government, Democrats will give him a pass once more.
What's interesting about his nomination is what it says about Alice-in-Wonderland politics in Washington. Right is wrong, wrong is right. It all depends on the political party. "How puzzling," observed Lewis Carroll's character, "all these changes are! I'm never sure what I'm going to be, from one minute to another."
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