Saturday, May 25, 2013
The Washington Post
Mitt Romney paid $1.9 million in taxes on $13.69 million in income in 2011, most of it from his investments, for an effective rate of 14.1 percent, according to hundreds of pages he released Friday in a move to quiet political controversy over his personal finances.
Republican presidential candidate and former Massachusetts Gov. Mitt Romney licks his fingers as he walks back to his seat after making himself a peanut butter and honey sandwich on his campaign plane en route to Las Vegas on Friday.
The Associated Press
RETURNS ANSWER SOME QUESTIONS, BUT RAISE OTHERS
Here are some of the details from the 2011 tax documents released by former Gov. Mitt Romney and his wife Ann:
The couple paid federal taxes of $1,935,708 on income of $13,696.951 for last year, somewhat below the $3.2 million in taxes his campaign had originally estimated he would pay.
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.
Several tax law experts said Friday that the newly released tax returns would not be much help in resolving critics' questions about his sprawling finances -- whether he used aggressive tax-deferral strategies, what might be the specifics and tax advantages of his numerous offshore investments, what was the source of his massive retirement account and what are the details behind his now-closed $3 million Swiss bank account.
Analysts said details about his investments 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 those from the past two years.
-- The Associated Press
The Republican presidential nominee could have paid less in taxes, but he engineered his 2011 returns to overpay the government to ensure that his effective tax rate would "conform" with his statement last month that he had paid at least 13 percent, according to his trustee, R. Bradford Malt.
Romney did that by not taking full advantage of his charitable deductions. In their joint return, he and his wife, Ann, listed $4.02 million in donations to charity last year -- nearly 30 percent of their income -- which substantially reduced their tax obligation. They claimed a deduction for only $2.25 million of those contributions.
Had the Romneys deducted all of their charitable donations, they would have paid about $467,000 less in taxes for an effective rate of 10.55 percent, according to an analysis by Rebecca Wilkins, a tax lawyer with the Citizens for Tax Justice.
Romney can amend his returns at any point over the next three years to take advantage of the potential deductions. If the Romneys had not taken any charitable deductions, their rate would have been 18.8 percent, said Wilkins.
Friday's disclosures followed months of political pressure on Romney, one of the richest Americans ever to win a major party's nomination, to reveal more information about his personal fortune, which is estimated at $190 million to $250 million.
This comes at the end of a turbulent week for Romney's campaign during which a leaked video showed the candidate, at a private fundraiser in May, dismissing the 47 percent of Americans who pay no income taxes. He said they were like "victims" and feel entitled to government handouts. "I'll never convince them they should take personal responsibility and care for their lives," he said.
Although Romney made good on his promise to release two years' worth of tax returns -- he released his 2010 filings in January -- the disclosures are unlikely to silence his critics, including President Obama and his allies.
Romney's 379-page 2011 returns show that he earned $6.8 million from capital gains and $3.6 million in interest. Romney earned about $190,000 in author and speaking fees, as well as $260,390 for sitting on the board of Marriott International.
None of his income was from wages. Capital gains are taxed at a flat rate of 15 percent, substantially lower than the 35 percent rate typically levied on the wages of those with the highest incomes.
In 2010, Romney earned $21.7 million and paid $3 million in taxes, for an effective rate of 13.9 percent.
Romney's 2011 returns are substantially different from the estimate his campaign provided in January. The estimate reported that he earned $20.9 million in 2011 and would pay $3.2 million in taxes, for an effective rate of 15.4 percent. Campaign spokeswoman Michele Davis said the difference was because the couple's income varies "significantly from year to year, depending primarily on what investments are sold and how much they have appreciated or depreciated."
Davis added that the couple filed for an extension, as they had in prior years, because not all of their investment information was available by the April 15 deadline. She said, however, that all taxes owed for 2011 were paid by April 15 and that the couple filed their returns Friday.
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