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Romney's 2011 tax rate 14.1%, return shows

WASHINGTON -- Mitt Romney paid nearly $2 million in federal taxes on $13.7 million in income that he and his wife reported last year, according to returns released Friday.

That works out to an effective tax rate of 14.1 percent, lower than millions of middle-income Americans but actually more than he had to pay.

Most of Romney's income was from investments. That is why his rate was lower than many taxpayers whose income was mostly from wages, which can be taxed at higher rates.

Romney's taxes have emerged as a key issue in the 2012 presidential race. Romney released his 2010 returns in January, but he still declines to disclose returns from previous years, including those while he worked at Bain Capital, the private equity firm he co-founded.

The Obama campaign and other Democrats have pushed for fuller disclosures, reminding the GOP candidate that his father, George Romney, released 12 years of his returns when he ran for president.

Overall, Mitt and Ann Romney's main tax return and separate forms for blind trusts totaled over 800 pages. The blind-trust income came from hedge funds and other complex investment vehicles.

The couple also reported $3.5 million in income from "outside the United States." Their forms included filings on holdings in Switzerland, Ireland, Germany and the Cayman Islands.

The Obama campaign accused Romney anew Friday of profiting from millions invested overseas and "loopholes and tax shelters only available to those at the top."

Apparently hoping to resolve basic questions voters might have, the Romney campaign also released a letter from his accountants saying that in the 20 years prior to 2010, the Romneys paid an average annual effective rate of 20.2 percent, never lower than 13.66 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. But many pay a higher rate.

The former Massachusetts governor, whose wealth is estimated at perhaps $250 million, is aggressively competing with Obama for the support of middle-class voters.

The Romneys' tax bill could have been lower. For the year, they claimed a deduction for $2.25 million of their $4.021 million in charitable contributions, said Brad Malt, trustee of the candidate's blind trust. More than half -- $2.6 million in cash -- went to the Church of Jesus Christ of Latter-day Saints, the documents show.

They could have claimed more in deductions, Malt said, but the couple "limited their deductions of charitable contributions to conform to the governor's statement in 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's vast fortune and his long association with Bain Capital have been much discussed this year.

Several tax law experts said Friday that his newly released tax returns would not be much help in resolving critics' questions about his sprawling finances -- whether he used aggressive tax-deferral strategies, what might be the specifics and tax advantages of his numerous offshore investments, what was the source of his massive retirement account and what are the details behind his now-closed $3 million Swiss bank account.

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

Also on Friday, Romney's campaign released physician statements declaring that he and running mate Paul Ryan are healthy and physically fit to meet the demands of presidency.


What they paid

Mitt & Ann Romney

2011

Adjusted gross income: $13.7 million

Federal income tax: $1.94 million

Effective tax rate: 14.1 percent

2010

Adjusted gross income: $21.6 million

Federal income tax: $3 million

Effective tax rate: 13.9 percent

Barack & Michelle Obama

2011

Adjusted gross income: $790,000

Federal income tax: $162,000

Effective tax rate: 20.5 percent

2010

Adjusted gross income: $1.78 million

Federal income tax: $454,000

Effective tax rate: 26.3 percent

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