Over the past two years, Bain Capital co-founder Mitt Romney, one of the wealthiest men ever to run for president, and his wife paid less than 15% of their income in taxes.
The former Massachusetts governor and his wife, Ann, paid an effective tax rate 13.9% for 2010, his tax returns, released today, show. The couple expect to pay a 15.4% effective rate when they file their 2011 returns.
The Romneys will pay $6.2 million in taxes on $42.5 million in income for 2010 and 2011. Most of that income comes from Romney's investments, and $13 million of it is in the form of carried interest from his share of Bain's profits. Carried interest is taxed at the 15% capital-gains rate rather than the higher earned income rate, which rises to 35%.
Romney retired from Bain in 1999.
Romney elected to release the returns, after months of first refusing and then delaying, after his surprise defeat in Saturday's South Carolina presidential primary. His Republican opponents, including primary winner Newt Gingrich, had made an issue of Romney's refusal to release the information.
Of the 54% of Americans who pay taxes, the average rate is 11%. But both Gingrich and President Barack Obama pay much higher rates—31.7% and 26.3%, respectively, in 2010—since most of their income is not investment-related.
Romney has not taken a stand on the issue of carried interest, which Democrats have assailed as unjust. But the tax proposals he has made would save him about 40% personally. Gingrich's tax plans, which would eliminate taxes on capital gains, would all but eliminate Romney's tax liability.