Romney's back against wall after tax revelations
Republican presidential candidates Mitt Romney and Newt Gingrich, right, during a debate on Monday night at the University of South Florida in Tampa
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Obama denounces economic inequality
At the core of President Obama's State of Union address was the improving but deeply wounded economy - the matter driving Americans' anxiety and the one likely to determine the next president.
Mitt Romney paid even less tax on his multimillion dollar income than was previously thought, it emerged yesterday as the embattled Republican presidential front-runner came under fire for exploiting controversial loopholes.
Mr Romney and his wife Ann paid about $6.2m (€4.8m) tax on income of $42.7m (€32.8m) in the past two years, according to hundreds of pages of tax filings released yesterday. Their effective tax rate was about 14pc -- less than half the 35pc paid by top earners in the US. Mr Romney had said he paid about 15pc.
The documents also show that the Romneys, who have an estimated fortune of $250m (€192m), hold investments in tax havens such as Bermuda and the Cayman Islands. They had a Swiss bank account until it was closed in 2010.
The former Massachusetts governor told a debate in Florida: "I'm proud of the fact that I pay a lot of taxes."
He defended lowering his bill via loopholes on investment income opened by President George W Bush. "I pay all the taxes that are legally required and not a dollar more," he said.
However, polls indicated he was rapidly becoming more unpopular among middle-class Americans. President Barack Obama was planning last night to call in his State of the Union address for loopholes used by millionaires such as Mr Romney to be closed to pay for schemes to help struggling low earners, prompting Mr Romney to accuse him of "divisive rhetoric".
The filings also disclosed that Mr Romney, who made his money as a private equity executive, gave at least $4.1m (€3.15m) in tithes to the Mormon Church over the past two years. Exit polls in last weekend's South Carolina primary showed his faith had deterred many evangelical Christians from supporting him.
After having his Iowa caucus win overturned and losing South Carolina to Newt Gingrich, Mr Romney has been overtaken in Florida polls by the former house speaker. Having led here by 18.5 percentage points on Saturday, Mr Romney now trails Mr Gingrich by 7.4 points, according to a RealClearPolitics average.
Polls indicate that Mr Romney's support has been badly damaged by attacks on his work as the head of Bain Capital in the 1980s.
Mr Romney previously insisted he would not release his tax returns until April, but was put under pressure into releasing them yesterday amid the criticism of his work at Bain Capital.
Mr Gingrich claims the company "looted" the firms it took over, leaving "thousands of lives" destroyed in relentless pursuit of profit.
The records show that Mr Romney greatly benefits from the fact that America's relatively low 15pc rate of capital gains tax (CGT) applies to so-called 'carried interest' -- the share of profits on past deals that private equity and hedge fund executives receive as a bonus.
After two lacklustre debate performances that contributed to his South Carolina loss, Mr Romney went on the attack in Tampa on Monday night, accusing Mr Gingrich of being an "influence peddler" forced to "resign in disgrace" after two decades as a Washington insider. Mr Gingrich was paid $25,000 (€19,200) a month to work as a 'consultant' for Freddie Mac, the government-backed mortgage lender that had to be bailed out by taxpayers for tens of billions of dollars.
Mr Gingrich's aides highlighted that he and wife Callista paid 31.6pc on income of $3.16m (€2.43m) in 2010 -- more than twice the Romneys' rate. Mr Obama and his wife Michelle paid 26pc tax on income of $1.8m (€1.4m) in 2010. (© Daily Telegraph, London)
- Jon Swaine in Tampa
Irish Independent
