Romney’s tax returns show extent, complexity of wealth

by
January 25, 2012

The Atlanta Journal-Constitution

WASHINGTON — Mitt Romney’s newly released tax returns represent an extraordinary accounting of the household finances and far-reaching corporate investments of one of the richest U.S. presidential candidates in generations, with an annual income that tops $20 million.

None of it came from wages, the primary source of income for most Americans. Instead, Romney and his wife, Ann, collected millions in capital gains from a profusion of investments, as well as stock dividends and interest payments.

The couple gave away $7 million in charitable contributions over the past two years, including at least $4.1 million to the Church of Jesus Christ of Latter-day Saints. Romney’s family has for generations been among the Mormon church’s most prominent members.

The Romneys sent somewhat less to Washington over that period, paying an estimated $6.2 million in federal income taxes. According to his 2010 return, Romney paid about $3 million to the IRS, for an effective tax rate of 13.9 percent.

For 2011, Romney estimates he will pay about $3.2 million, for an effective rate of 15.4 percent. That’s in line with his earlier estimates, but sharply lower than the rates paid by President Obama and Romney’s closest Republican rival, Newt Gingrich.

Among the new details contained in the documents are Romney’s continuing profits from the private equity firm he founded but no longer runs, a Swiss bank account closed just as Romney launched his White House run and new listings of investment funds that were set up in offshore locations from the Caribbean to Ireland and Luxembourg.

Romney’s advisers stressed that he met all his federal tax obligations, provided maximum transparency and did not take advantage of “aggressive” strategies often used by the ultra-rich.

“The average American has a hard time understanding their own two-page tax return let alone Gov. Romney’s 200-page return,” said Joseph Bankman, a Stanford University professor of business and law who has testified to Congress on tax issues. “What would jump out at anyone is the sheer amount of money and low tax rate he pays, as well as the enormous complexity of his financial transactions.”

Romney’s income puts him in the top 0.006 percent of Americans, based on the most recent Internal Revenue Service data, from 2009. That year, only 8,274 filers reported income above $10 million.

He could be worth up to $250 million, based on previously released financial information.

Asked during a round of TV interviews Tuesday about Romney’s tax rate, given that he’s a multimillionaire, White House adviser David Plouffe said: “We need to change our tax system. We need to change our tax code so that everybody is doing their fair share.”

Romney’s GOP rivals had no immediate comment.

House Speaker John Boehner, R-Ohio, defended Romney’s tax rate as being close to what most Americans pay on long-term capital gains from the sale of investments.

“We all know that there’s a reason we have low rates on capital gains,” Boehner told reporters. “That is because it spurs new investment in our economy and allows capital to move more quickly.”

To read more, visit: http://www.ajc.com/news/romneys-tax-returns-show-1316486.html

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