Republican presidential frontrunner Mitt Romney admitted yesterday that his effective tax rate is much lower than that of the average American taxpayer.
Romney, the winner of the Iowa caucuses and New Hampshire primary, told reporters in South Carolina, whose crucial primary is next on the Republican nominating calendar, that his tax rate is "probably closer to the 15% rate than anything." The former Massachusetts governor has refused to release his tax returns, as is customary, though not required, of presidential candidates. During a Republican debate on Monday, Romney indicated that he would release his taxes in April.
Over the last decade, Romney said, "my income comes overwhelmingly from investments made in the past, rather than ordinary income, or rather than earned annual income." Romney co-founded Bain Capital, retiring 11 years ago; his fortune is estimated to be as high as $250 million, making him one of the richest men ever to seek the presidency.
Romney's admission is likely to reignite the debate over the so-called "carried interest" loophole, which allows hedge fund and private equity executives to pay the 15% capital gains rate, rather than the higher ordinary income tax rate, which can be as high as 35%, on their share of investors' profits.
Romney also told reporters that he gets "speaker's fees from time to time, but not very much." According to his financial disclosures, "not very much" is $374,327.62, or $41,592 per speech.