Romney Taxes At $1.9M For 2011
WASHINGTON (AP) – Mitt Romney paid nearly $2 million in federal taxes on $13.7 million in income that he and his wife reported last year, his tax returns showed Friday. That came to an effective tax rate of 14.1 percent – 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.
The Obama campaign and other Democrats have pushed for fuller disclosures, seeking potential ammunition for the campaign.
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 dropped 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 in 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 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.”
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.
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.