Mitt Romney paid even lower tax rate than previously thought
Republican presidential candidate, former Massachusetts Gov. Mitt Romney. Photo: AP
Mitt Romney, the Republican presidential front-runner, paid an even lower rate of tax on his multi-million dollar income than was previously thought, it emerged last night.
The former Massachusetts governor released tax returns showing that he and his wife Ann paid $3 million (€2.30m) tax on income of $21.7 million (€16.67 million) in 2010 – a rate of 13.9 per cent.
Mr Romney, who has a fortune of about $250 million (€191 m), said during a televised debate in Tampa earlier on Monday night: “I’m proud of the fact that I pay a lot of taxes.”
He expects to pay $3.2 million (€2.45 m) on income of $20.9 million (€16 m) for last year, according to an official estimate. This would make his effective tax rate 15.4 per cent, around the figure he gave under questioning from reporters last week.
The figures show that Mr Romney's tax rate was almost half that of President Barack Obama's, despite Mr Obama's income being much lower. He and his wife Michelle paid 26 per cent tax on $1.8 million (€1.38 m) in 2010, their tax return showed. Newt Gingrich, Mr Romney's rival for the Republican presidential nomination, paid 31.6 per cent on $3.16 million (€2.42 m) earned with his wife, Callista.
The documents also disclosed that Mr Romney gave $7 million (€5.37m) in charitable donations over the past two years, including at least $4.1 million (€3.15m) to the Mormon Church of Jesus Christ of Latter-day Saints. Exit polls in South Carolina showed that his unusual faith deterred many evangelical Christians from supporting him.
Having initially insisted that he would not release the returns until April, Mr Romney agreed to release them after coming under intense pressure on the issue in televised debates last week, before losing the South Carolina primary to Newt Gingrich.
Mr Romney, who led the private equity firm Bain Capital in the 1980s, enjoyed a lower tax rate than most Americans because his income came largely from returns on investments and capital gains. Under controversial reforms by George W. Bush, such income is taxed at a flat rate of 15 per cent.
Regular earned income is subject to federal income tax of 35 per cent above $379,150 (€291.363). Mr Romney pays a similar rate of tax to someone earning about $60,000 (€46,107) through conventional income.
Mr Romney was also able to cut his taxable income by almost $5 million (€3.8 m) because of losses carried over from previous years, thanks to a controversial rule.
Pre-empting the issue during the debate, Mr Romney said: “I pay all the taxes that are legally required and not a dollar more”. He added: “I don’t think you want someone as the candidate for president who pays more taxes than he owes.”
The returns showed that the Romneys had a string of foreign holdings including assets in the Cayman Islands, a famous tax haven, and that they held a bank account in Switzerland, which is renowned for its tax advantages and secretive accounting.
A spokesman for Mr Romney told reporters that the account was closed after 2010 and that income from its contents were subject to full US tax. According to a report by Reuters, Mr Romney closed the account after being advised that it could be politically embarrassing.
- Jon Swaine
© Telegraph.co.uk
