Winnipeg Free Press - PRINT EDITION

Romney camp gets down to brass tax

Republican hopeful releases 2011 return amid pressure

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WASHINGTON -- Mitt Romney and his wife, Ann, paid $1.94 million in federal taxes on last year's income of $13.7 million, for an effective tax rate of 14.1 per cent, his campaign said Friday.

That's slightly above the 13.9 per cent rate the couple paid in 2010. Most of the 2011 income was from investments.

Campaign officials said the couple filed the return Friday with the Internal Revenue Service, after receiving an extension.

Romney's taxes have emerged as a key issue during the presidential race with U.S. President Barack Obama. Romney released his 2010 tax returns and a 2011 estimate in January, but he has declined to disclose his returns from earlier years.

His vast fortune and his long association with Bain Capital, the private equity firm he cofounded, have been much discussed this year.

His campaign earlier estimated Romney would pay about $3.2 million in taxes for the year, an estimate well above the $1.9 million paid. He paid about $3 million in federal income taxes in 2010 -- an effective rate of 13.9 per cent.

Critics, including Obama, have urged Romney to release more than just the two years of returns and follow his father's model. When George Romney ran for president, he released 12 years of tax returns.

Mitt Romney's campaign put out a summary Friday by Brad Malt, the trustee of the couple's blind trust, saying that over the 20-year 1990-2009 period, the Romneys owed both state and federal income taxes and paid federal taxes at an effective annual rate of 20.2 per cent

Obama's own tax return for last year showed 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 per cent. 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, fuelled by the bestselling books.

Most of Romney's income is from investments held in a blind trust, and campaign aides have stressed he makes no decisions on how his money is invested.

During the 20-year period, the Romneys paid an effective federal income tax rate of between 13.45 per cent and 13.66 per cent each year, Malt wrote.

For last year, the Romneys claimed a deduction for $2.25 million of their $4.021 million in charitable contributions, Malt said. In the previous year, a large percentage of those contributions went to the Mormon Church.

Romney said in August he's never paid less than 13 per cent of his income in taxes during the past decade.

The former Massachusetts governor, who would be among the richest presidents ever elected, is competing with Obama for the support of middle-class voters. Romney has estimated wealth of as much as $250 million. His tax rate of 14.1 per cent is below that of many Americans because most of it flows from capital gains, which are taxed at 15 per cent whereas the top marginal income tax rate is 35 per cent.

Several tax-law experts said Romney's newly released tax returns would not be much help in uncovering the most persistent mysteries -- whether he used aggressive tax-deferral strategies, what are the specifics and tax advantages of his numerous offshore investments, what is the source of his massive retirement account and what are the details behind his now-closed $3 million Swiss bank account.

The analysts said those details could emerge only if Romney provided far more of his tax returns -- including files dating back to his years at Bain Capital, the private firm he left in 2001. Romney, who initially refused to disclose any tax returns, has drawn the line at providing only his 2010 and 2011 returns.

-- The Associated Press

 

Republished from the Winnipeg Free Press print edition September 22, 2012 A19

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