Mitt Romney’s Tax Returns: Paid Only $6.2M in Taxes but $7M to Church and Charity

Republican presidential candidate Mitt Romney released tax records on Tuesday indicating he will pay $6.2 million in taxes on a total of $42.5 million in income over the years 2010 and 2011.

Mitt Romney's tax rate is below that of most wage-earning Americans because most of his income, as outlined in more than 500 pages of tax documents, flows from capital gains on investments. Photo: Mitt Romney/Flickr

The details of the returns, confirmed by a senior campaign official, provide the most detailed view yet of his wealthy family’s finances.

The disclosure comes after a barrage of pressure to release his returns – which Mr. Romney has never done, even when he was elected governor of Massachusetts.

The former private equity executive released tax returns indicating he and his wife, Ann, paid an effective tax rate of 13.9 percent in 2010. They expect to pay a 15.4 percent rate when they file their returns for 2011.

Romney’s tax rate is below that of most wage-earning Americans because most of his income, as outlined in more than 500 pages of tax documents, flows from capital gains on investments, Reuters reports.

The disclosure showed a vast array of investments from a recently closed Swiss Bank account to holdings in Bermuda to the Cayman Islands, all underscoring the breadth and depth of his wealth that has become central in his bid for the Republican presidential nomination.

“Oh, I’m sure people will talk about it,” Romney said during a debate last night. “I mean, you’ll see my income, how much taxes I’ve paid, how much I’ve paid to charity. You’ll see how complicated taxes can be.”

According to The New York Times, Mr. Romney, a Mormon, has long said that he had promised to give 10 percent of his income to his church. His tax return shows that over two years he and his wife, Ann, gave $7 million in charitable contributions, including $4.1 million to the Church of Jesus Christ of Latter-Day Saints.

Romney released the tax returns after a week in which his chief rival for the Republican presidential nomination, former House of Representatives Speaker Newt Gingrich, questioned whether Romney was hiding information about his finances and cast him as being out of touch with most Americans.

During the debate, Mr. Romney had predicted that there would be little in his tax returns that would prove surprising.

“You’ll see my income, how much taxes I’ve paid, how much I’ve paid to charity,” Mr. Romney added in the debate. “You’ll see how complicated taxes can be. And will there be discussion? Sure. Will it be an article? Yeah. But is it entirely legal and fair? Absolutely. I’m proud of the fact that I pay a lot of taxes.”

“I pay all the taxes that are legally required and not a dollar more,” Mr. Romney said during Monday night’s debate. “I don’t think you want someone as the candidate for president who pays more taxes than he owes.”

Romney advisers stressed that the holdings in the Caymans – along with those in a Swiss bank account that was closed in 2010 after an investment adviser decided it could be politically embarrassing to Romney – were reported on tax returns and were not vehicles to avoid taxes.

Details about Mr. Romney’s tax payments, wealth and income will inevitably be compared with similar disclosures already made by Mr. Gingrich, as well the man they hope to unseat, President Obama.

Mr. Obama and his wife, Michelle, released their tax returns in April, showing an adjusted gross income of $1,728,096 for 2010 – much of it from sales of his books ”Dreams From My Father” and ”The Audacity of Hope.” The Obamas paid $453,770 in federal taxes, for an effective tax rate of 26.3 percent.

Mr. Gingrich, who on Saturday won the Republican presidential primary in South Carolina, released his own tax returns last week showing that he and his wife, Callista, had an adjusted gross income of $3,162,424 from their various business ventures in 2010. They paid $994,708 in federal tax, according to the return, for an effective tax rate of 31.7 percent.

Long considered the front-runner for the 2012 Republican presidential nomination, Romney was staggered by Gingrich’s lopsided win in South Carolina, and is looking to regain enough momentum to defeat Gingrich in Florida, which votes on January 31.

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