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Mitt Romney releases long-awaited tax return

Republican presidential hopeful Mitt Romney releases his much-anticipated 2011 tax return, which shows he paid a rate of 14.1%.

22 September 2012, 12:00am
Critics have used Romney's refusal to release returns as evidence that he is an out-of-touch millionaire
Republican presidential candidate Mitt Romney paid $1.9m in taxes on more than $13m in income in 2011, an effective tax rate of 14.1%, his campaign has said.

The private equity tycoon has already released his 2010 tax return, for which he paid about $3m, a 13.9% rate.

The top rate of income tax in the US is 35%, but Mr Romney lives mainly on income derived from his investments, for which only 15% tax is payable.

The announcement was made on Friday ahead of the release of the full return and Romney's 20-year summary, conducted by PricewaterhouseCoopers and made available for public view online.

Fighting back against Democratic party claims that he paid little or no taxes in earlier years, the Romney campaign also released a letter certifying he owed an average effective federal tax rate of 20.2% over the 20-year period ending in 2009.

Democrats led by Senate Democratic Leader Harry Reid have suggested Romney paid scant taxes in those earlier years. Despite heavy political pressure, his campaign has refused to release earlier returns.

President Barack Obama and his Democratic allies have used Romney's refusal to release more returns as evidence that he is an out-of-touch millionaire.

Romney, who faces Obama in the November 6 election, earns the majority of his income from investment profits, dividends and interest, which is taxed at a lower rate than income.

Romney's campaign said the lowest annual federal personal tax rate he owed over the 20 years was 13.66%.

Romney's 2011 tax rate of 14.1% compares with a previous estimate of 15.4% for the year by his aides. The Romneys filed their 2011 return with the Internal Revenue Service on Friday after applying for an extension earlier in the year.

The campaign also released a letter from his accountants with a summary of his returns from 1990-2009, which said he paid an effective average of 20.2% over the period, with the lowest return at 13.66%.

The move came amid attempts by the Romney campaign to shift the focus of recent days away from remarks he made at a private donor dinner.

In the video secretly recorded earlier this year, he disparages Obama voters, saying they pay no income tax.

Romney's critics say he should follow the example of his father, former Michigan Governor George Romney, who released a dozen years of tax returns during his own unsuccessful run for president in 1968.

But the former Massachusetts governor has said he is following 2008 Republican White House candidate John McCain's example of releasing two years of taxes.

Obama's 2011 tax return showed he paid an effective rate of 20.5%, on an income of $789,674.

On average, US middle-income families, those making from $50,000 to $75,000 a year, pay 12.8%, according to congressional research.

As he released his 2010 return in January this year, Romney said he had paid "all the taxes that are legally required and not a dollar more".

But according to Brad Malt, the trustee that controls Romney's wealth as he runs for president, the Romneys donated $4m to charity in 2011, claiming $2.25m of it as a deduction.

"The Romneys thus limited their deduction of charitable contributions to conform to the Governor's statement in August, based upon the January estimate of income, that he paid at least 13% in income taxes in each of the last 10 years," Malt said.

The campaign has stressed that the blind trust run by Malt means that the candidate is making no decisions on how his money is invested.

Tax law experts say the release of the 2011 return - and the summary of the past 20 years - will do little to silence questions about Romney's past tax liability, including the source of a $100m retirement account and the tax advantages of his offshore investments.

 

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