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| Republican presidential candidate and former Massachusetts Gov. Mitt Romney speaks at a campaign fundraising event at Red Rock Hotel and Casino in Las Vegas, Friday, Sept. 21, 2012. |
WASHINGTON
(AP) -- Mitt Romney, one of the wealthiest candidates ever to seek the
presidency, paid nearly $2 million in federal taxes on $13.7 million in
income that he and his wife reported last year, his U.S. returns showed
Friday. That came to an effective tax rate of 14.1 percent, lower than
millions of middle-income Americans but actually more than he had to
pay.
Most of Romney's income was from
investment returns. That is why his rate was lower than taxpayers whose
income was mostly from wages, which can be taxed at higher rates.
Romney's
taxes have emerged as a key issue during the 2012 presidential race
with President Barack Obama. Romney released his 2010 returns in
January, but he continues to decline to disclose returns from previous
years - including those while he worked at Bain Capital, the private
equity firm he co-founded.
The Obama campaign
and other Democrats have pushed for fuller disclosures, reminding the
Republican candidate that his father, George Romney, released a dozen
years of returns when he ran for president.
Overall,
the Romneys' main tax return and separate forms for blind trusts
totaled over 800 pages. The blind-trust income came from hedge funds and
other complex investment vehicles. The couple also reported $3.5
million in income "from sources outside the United States," citing
"various countries." Their forms included filings on holdings in
Switzerland, Ireland, Germany and the Cayman Islands.
The
Obama campaign accused Romney anew of profiting from millions invested
overseas and "loopholes and tax shelters only available to those at the
top."
Apparently hoping to resolve basic
questions voters might have, the Romney campaign also released a letter
from his accountants saying that in the 20 years prior to 2010 the
Romneys paid an average annual effective rate of 20.2 percent, never
lower than 13.66 percent. On average, middle-income families - those
making from $50,000 to $75,000 a year - pay 12.8 percent of their income
in federal taxes, according to Congress' Joint Committee on Taxation.
But many pay a higher rate.
The former
Massachusetts governor, whose wealth is estimated at perhaps $250
million, is aggressively competing with Obama for the support of middle
class voters.
Obama's own tax return for last
year showed that he and his wife, Michelle, paid $162,074 in federal
taxes on $789,674 in adjusted gross income, an effective tax rate of
20.5 percent. Their income plunged from $1.7 million in 2010, with
declining sales of the president's books. In 2009, the Obamas reported
income of $5.5 million, fueled by the best-selling books.
The Romneys' tax bill could have been lower.
For
the year, they claimed a deduction for $2.25 million of their $4.021
million in charitable contributions, said Brad Malt, trustee of the
candidate's blind trust.
The Romneys gave $2.6
million in cash to the Church of Jesus Christ of Latter-day Saints, the
documents show. They gave just over $2 million in non-cash charitable
contributions - including donations of stock holdings in Domino's Pizza,
Dunkin Donuts and Warner Chilcott - to a family trust.
They
could have claimed more in deductions, Malt said, but the couple
"limited their deductions of charitable contributions to conform to the
governor's statement (n August, based on the January estimate of income,
that he paid at least 13 percent in income taxes in each of the last 10
years."
Romney seemed to be painted into a
corner by that statement, which came in reaction to Democratic Senate
Majority Leader Harry Reid's claim to have heard that the Republican had
paid no taxes in some years.
Romney will
surely be reminded by the Democrats that he also said in August,
defending his right to pay no more taxes than he owed: "I don't pay more
than are legally due, and frankly if I had paid more than are legally
due I don't think I'd be qualified to become president."
He appears to be physically qualified by any measure.
The
campaign released a separate report Friday - by Romney's longtime
physician, Dr. Randall Gaz of Massachusetts General Hospital - that said
he is healthy and ready to meet the rigorous demands of the presidency.
The
report said Romney's heart appears healthy, and he takes a baby aspirin
and medicine to treat high cholesterol to help keep it that way. He
doesn't smoke or drink. And his resting heart rate is a low 40 beats per
minute, in the range of well-trained athletes and reminiscent of
President George W. Bush, who also had a low resting rate.
Romney is 6 feet 1 1/2 inches tall and weighs 184 pounds.
As
for his taxes, the Romneys' 2011 rate was slightly above the 13.9
percent effective rate they paid for 2010 when their federal tax bill
was about $3 million.
They paid federal taxes
of $1,935,708 on income of $13,696.951 for last year, according to the
returns filed Friday with the Internal Revenue Service. They had
obtained a filing extension beyond the usual April 15 tax deadline. His
campaign earlier estimated that he would pay about $3.2 million in taxes
for the year, well above the $1.9 million actually paid.
Most
of Romney's income is from investments held in a blind trust, and
campaign aides have stressed that he makes no decisions on how his money
is invested.
Most of the income for the year
came from investments, which are now generally taxed at 15 percent
whereas the top marginal rate for income from wages is 35 percent.
The
Romneys reported $6.8 million in capital gains, such as from the sale
of stocks and other securities, and $6.37 million from dividends and
taxable interest.
Romney's vast fortune and his long association with Bain Capital have been much discussed this year.
Several
tax law experts said Friday that his newly released tax returns would
not be much help in resolving critics' questions about his sprawling
finances - whether he used aggressive tax-deferral strategies, what
might be the specifics and tax advantages of his numerous offshore
investments, what was the source of his massive retirement account and
what are the details behind his now-closed $3 million Swiss bank
account.
Analysts said details about his
investments could emerge only if Romney provided far more of his tax
returns - including files dating back to his years at Bain, the private
firm he left in 2001. Romney, who initially refused to disclose any tax
returns, has drawn the line at providing those from the past two years.
"All
the important compliance and policy questions relating to Romney's
personal tax matters relate to the past," said Edward D. Kleinbard, a
law professor at the University of Southern California and former chief
of staff of Congress' Joint Committee on Taxation. "The issue has never
been Romney's 2011 tax return - in fact, it is a distraction to the real
issues."
Only multiple returns would provide
details about Romney's $100 million retirement account and how it grew,
Kleinbard said. He also earlier returns would be crucial in knowing how
often he paid gift tax on family trusts.
Joseph
Bankman, a Stanford University law school professor and expert on tax
law, said, "It's the Bain years we'd really need to know to have a full
assessment of his tax strategies." Bankman said that the 2010 and 2011
returns "only raised these questions, but they can't provide real
answers."
The Romneys applied a $1.5 million tax refund to their 2012 estimated tax payments.
The
couple reported $190,350 in book royalties and speaking fees. And
Romney also reported $260,390 in income last year from serving on
various boards of directors.
Republican vice
presidential nominee Rep. Paul Ryan of Wisconsin and his wife Janna,
whose returns were also released Friday by the Romney campaign, paid
$64,764 in taxes on $323,416 of adjusted gross income in 2011, for an
effective rate of 20 percent.
Just over half
of their income came from Ryan's congressional salary. Other income
flowed from rental real estate and other investments, including a trust
inherited by Janna Ryan. They donated $12,991 to charity, including to
the Boy Scouts of America
