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July 28, 2014

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Romneys paid $1.94 million in fed taxes for 2011

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Charles Dharapak / AP

Republican presidential candidate and former Massachusetts Gov. Mitt Romney gets out of his vehicle before boarding his campaign plane in West Palm Beach, Fla., Friday, Sept. 21, 2012.

WASHINGTON — Mitt Romney and his wife, Ann, paid $1.94 million in federal taxes on last year's income of $13.7 million, for an effective tax rate of 14.1 percent, his campaign said Friday.

That's slightly above the 13.9 percent rate the couple paid in 2010. Most of the 2011 income was from investments.

Campaign officials said the couple filed the return Friday with the Internal Revenue Service, after receiving an extension. They were to publicly release their full 2011 returns late Friday.

Romney's taxes have emerged as a key issue during the 2012 presidential race with President Barack Obama. Romney released his 2010 tax returns and a 2011 estimate in January, but he has declined to disclose his returns from earlier years.

His vast fortune and his long association with Bain Capital, the private equity firm he cofounded, have been much discussed this year.

His campaign earlier estimated that Romney would pay about $3.2 million in taxes for the year, an estimate well above the $1.9 million actually paid. He paid about $3 million in federal income taxes in 2010 — an effective rate of 13.9 percent.

Critics, including Obama, have urged Romney to release more than just the two years of returns and follow his father's model. When George Romney ran for president, he released 12 years of tax returns.

Mitt Romney's campaign did put out a summary Friday by Brad Malt, the trustee of the couple's blind trust, saying that over the 20-year 1990-2009 period, the Romneys owed both state and federal income taxes and paid federal taxes at an effective annual rate of 20.2 percent

Obama's own tax return for last year showed that he and his wife, Michelle, paid $162,074 in federal taxes on $789,674 in adjusted gross income, an effective tax rate of 20.5 percent. Their income plunged from $1.7 million in 2010, with declining sales of the president's books. In 2009, the Obamas reported income of $5.5 million, fueled by the best-selling books.

The Romneys' exact totals for 2011 were federal taxes of $1,935,708 and on income of $13,696.951.

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.

During the 20-year period, the Romneys paid an effective federal income tax rate of between 13.45 percent and 13.66 percent each year, trustee Malt wrote.

For last year, the Romneys claimed a deduction for $2.25 million of their $4.021 million in charitable contributions, Malt said. In the previous year, a large percentage of those contributions went to the Mormon Church.

They could have claimed a higher charitable deduction, Malt said, but the couple "limited their deductions of charitable contributions to conform to the governor's statement (n August, based on the January estimate of income, that he paid at least 13 percent in income taxes in each of the last 10 years."

Romney told reporters in August that he's never paid less than 13 percent of his income in taxes during the past decade. He said that Democratic Senate Majority Leader Harry Reid's claim to have heard that he paid no taxes in some years was "totally false."

The former Massachusetts governor, who would be among the richest presidents ever elected, is aggressively competing with Obama for the support of middle class voters. Romney has estimated wealth of as much as $250 million.

His tax rate of 14.1 percent is below that of many Americans because most of it flows from capital gains, which are taxed at 15 percent whereas the top marginal income tax rate now is 35 percent.

On average, middle-income families, those making from $50,000 to $75,000 a year, pay 12.8 percent of their income in federal taxes, according to Congress' Joint Committee on Taxation.

Several tax law experts said Friday that Romney's newly released tax returns would not be much help in uncovering the most persistent mysteries of the candidate's sprawling finances — whether he used aggressive tax-deferral strategies, what are the specifics and tax advantages of his numerous offshore investments, what is the source of his massive retirement account and what are the details behind his now-closed $3 million Swiss bank account.

The analysts said those details 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 only his 2010 and 2011 returns.

"The issue has never been Romney's 2011 tax return — in fact, it is a distraction to the real issues," said Edward D. Kleinbard, a law professor at the University of Southern California and former chief of staff of Congress' Joint Committee on Taxation. "All the important compliance and policy questions relating to Romney's personal tax matters relate to the past."

Only multiple returns would provide details about Romney's $100 million retirement account and how it grew, Kleinbard said. He also earlier returns would be crucial in knowing how often he paid gift tax on family trusts.

Joseph Bankman, a Stanford University law school professor and expert on tax law, said Friday, "It's the Bain years we'd really need to know to have a full assessment of his tax strategies." Bankman said that the 2010 and 2011 returns "only raised these questions, but they can't provide real answers."

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  1. This is so great.

    The Romneys reduced their charitable donation deduction IN ORDER TO PAY MORE IN TAXES.

    "...the Romneys only claimed 16% in charitable deductions, thus keeping their income tax rate higher, in order "to conform" to Romney's previous comments about his tax rate..."

    Mitt Romney intentionally overpaid taxes to the government in order to have a talking point on the campaign trail. He picked 14.1% as his tax rate and adjusted his deductions in order to hit that number!

    What a disaster.

    And, of course, this crass political decision is yet another flip flop for Romney:

    "His move to limit his charitable deduction-and keep a higher rate of taxes-last year, however, seems to butt heads with statements the former Massachusetts governor has made regarding taxes."

    "I don't pay more than are legally due and frankly if I had paid more than are legally due, I don't think I'd be qualified to become president," Romney told ABC News in July. "I'd think people would want me to follow the law and pay only what the tax code requires."

    Doh!

  2. Kevin,

    It takes real brass to criticize Romney for NOT taking everything he was entitled to, especially given that his charitable giving was a very significant percentage of his income. And the implication was that a large part of those donations were not to the Mormon church.

    Spin it any way you want (which you will) but it appears that Reid propagated a flat out lie.

    Let's see what the debates bring. That should be a real gaffe-fest (or feast.)

  3. I'm holding Romney to the standard he set for himself, Jim. Why can't you?

    "I don't pay more than are legally due and frankly if I had paid more than are legally due, I don't think I'd be qualified to become president," Romney told ABC News in July. "I'd think people would want me to follow the law and pay only what the tax code requires."

    Yet rather than pay what was "legally due," he intentionally limited deductions in order to pay MORE!

    What do you make of his quote and then his tax returns? Don't you agree that he just declared HIMSELF "unqualified" to be President?

  4. Then let's hold Obama to the exact same standard. Obama said if he couldn't get things done in one term he didn't deserve a second one.

    Neither of these two men are qualified or deserve to be President. In no particular order I could go with Hillary, Huntsman or Wesley Clark. James Webb of Virginia would be a very interesting proposition, too.

    Bottom line is that Romney has paid taxes and for one reason or another does not want the exact details made public. That is understandable since there are many who will put him in a no-win light. Let's listen to what Reid has to say. I'll wager it is something along the lines that he felt his source to be credible and that it was his duty to act on it. Reid will avoid the charge of actually being a liar by throwing his source under the bus.

  5. "Spin it any way you want (which you will) but it appears that Reid propagated a flat out lie."

    1) It "appears?" Why can't you state that categorically?

    Oh, that's right... because Romney won't release his tax returns! HAHAHAHAHA!

    2) Are you talking about the statement from Willard's accountants with vague averages from a 20-year period? Let me ask you something. Say those numbers are exactly what they appear to be. If so, why isn't Romney willing to just release the returns? Why the subterfuge of a sworn statement?

    3) You know Willard has a storied history of lying about his tax returns, then amending them to "match" his "public statements," right? He did this during his run for Governor ten years ago. He said he had filed as a Mass. resident when he had not, so he amended his returns to match his rhetoric!

    Given this, is it really that crazy to wonder if he "amended" prior returns in order to ensure he had paid somewhere around 14% per year?

    I want to see the returns AS THEY WERE FILED.

    You should want the same thing.

    I mean, he's not a single mother of six, so I guess you're gonna be easy on him, but you should really question all this subterfuge.

  6. Kevin,

    If the minimum amount he paid was 13.66% as it is claimed, the only real question was did that occur in a year before or after the Bush tax cut on the investment tax.

  7. "If the minimum amount he paid was 13.66% as it is claimed, the only real question was did that occur in a year before or after the Bush tax cut on the investment tax."

    No, the real question is WHY WON'T HE RELEASE THE ACTUAL RETURNS?

    That's the question you should be asking, given his history of being dishonest about his taxes, and given his history of amending prior returns to "match" his public statements.

    You've fallen for Romney's spin and can't bring yourself to ask why Romney won't just release his returns.

  8. Bob: WRONG.

    Romney released 2 years of tax returns, reporting his income and taxes, yet only released a "summary" of the past 20 years.

    If he can release the summary, he can release the returns. Given his history of dishonesty on taxes, he owes that to the voters.

  9. Kevin,

    This should make you feel better. They also released letters of health on Romney and Ryan today. Romney has mild symptoms from an enlarged prostate so that means he is not a perfect a$$h***.

  10. Jim: Still pathetically deflecting from the subject at hand.

    Given Romney's history of amending his tax returns to match his rhetoric, there's no fair-minded individual who can take Romney at his word.

    The letter from Romney's mommy describing his "average annual effective federal rate" does not tell us several things that Americans should know.

    First, what was Romney's AGI while paying those rates? Given Romney's income is based on investment profits, things get sketchy very quickly.

    "But if Romney paid only a very small amount -- say, $20,000 on $20 million -- it would be hard to award Reid many pinocchios for calling that nothing."

    "Such a low-payment scenario is considered quite plausible by tax experts, who noted that investors can pick which investments to realize each year to maximize their tax benefit. In a year such as 2008, when the global markets tanked, an investor would likely have more than enough losses to offset gains. Indeed, Romney's 2010 tax returns show a carryover capital loss credit, meaning he had more losses than he could use the year before."

    "In other words, without seeing Romney's actual return -- or at least without knowing what Romney declared as his adjusted gross income -- it's impossible to know if the rate he paid bears any relation to Romney's economic reality. "

    "Romney's claimed rate is misleading in another way. Boston College tax law professor Brian Galle noted that Romney's IRA has grown since 1999 at a rate of roughly $9 million to $10 million per year. Yet he pays no taxes on those gains. Adding $10 million to his 2011 income of $13.8 million, for instance, nearly doubles it, meaning his tax rate is roughly half of what his real gain was."

    Given Romney's history of lying to voters about his tax returns, and the funny, clever math accountants can use to fudge the numbers, a letter from Romney's mommy isn't enough to answer the questions voters have about Romney's tax returns.

    Jim, why won't Romney just release his returns? You don't think there's ANYTHING strange about a letter from Romney's accountants rather that the actual returns?

  11. Sept. 28!???

  12. There is a difference between capital gain taxes and income taxes. After paying your income taxes on money that you have earned you risk that money by investing it and if your "RISK" pays off you pay taxes on that profit (Capital gains). Capital gains SHOULD be lower because you are taking a risk and paying ANOTHER tax. If people didn't take risks investing their hard earned money our country would be in shambles!

  13. However you break down all the figures, and how much he gave to charity, paid in taxes, etc etc etc - the only conclusion that comes to mind is:

    This is one filthy, F'ing rich man!!! Probably even richer than any tax return will show. And HOW does that REALLY make him qualified to be President of the United States?? Or maybe his accountants are more qualified to be in the Oval Office since they are the brains behind all his "financial" wrangling

  14. Is everyone happy now that he has released a tax return? He did not deduct 1.75 million he could have. He paid more than he had to. He gave away about 33% of his income to charity which I am sure did a better job of helping people with it than the Federal government would have done. Now can we get back to jobs, economy, deficit,immigration, security, and other issues a president needs to be able to manage?

  15. Kevin 1:10: the Romney's did NOT reduce their charitable contributions. They did not CLAIM all their contributions. Big difference. Further, contributions are a real good thing. The churches are big on helping the needy--so taxpayers shouldn't have to. Ever hear of St. Vincent De Paul's shelters? Catholic Community Charities. The Mormons may be a bit more circumspect but I've never heard of them turning someone away. And, I know of individuals within the church who receive extraordinary assistance. (Psst. I'm not LDS.)

  16. Question, how much is four mil. with it being equal to ten percent of income as required tithe by the Mormon church.

    I think his income must have been around forty mil. but then again he reduce his actual demonstrated deduction of charitable contribution, therefore he must have made more than 40 mil.

    A minor point, meaning he then put away 40-13=27. Just guessing here don't release the LDS hounds, I just had a question not an accusation.

  17. Now let's go a little further and see if that dog hunts. Say Romney made in excess of forty mil. and stashed twenty seven mil, when you adjust his total tax per income he only paid four percent, but who cares anyway he can't spend it all in this life time, but wait his heirs can once they do away with capital gains right and were all for that right.