guardian.co.uk,
Chris McGreal in Tampa, Tuesday 24
January 2012
 |
| The low tax paid by Mitt Romney will add to criticism of how the Republican presidential contender's firm made large profits by throwing people out of work. Photograph: Tristan Spinski/Corbis |
Mitt Romney
paid taxes on his multimillion-dollar income at a rate far below that of the
average American, his tax returns reveal.
The
returns, which the Republican presidential contender had steadfastly refused to
release until now, show Romney earned $45m (£29m) over the past two years and
paid just $6.2m in taxes, a rate of about 15%. Most of the income was derived
from investments from his $200m-plus fortune.
The
documents show Romney's income places him in the top 1% of earners in the US,
which is only likely to add to the political embarrassment around the release
of the returns because of its resonance in the age of the Occupy movement.
Romney's
rivals for the Republican nomination will tread carefully in attempting to
exploit his vast income and low taxes, in part because they have it as an
article of faith that government spending, and therefore taxes, are far too
high. But if he is the Republican presidential nominee against Barack Obama,
the Democrats can be expected to portray his extreme wealth and relatively low
taxes as a prime example of how the rich do not pay their fair share while
shifting the burden to the less privileged.
It will
also undermine Romney's attempts to make out he is an just an ordinary American
who "lived in the real streets of America" and "didn't inherit
money from my parents" when his critics portray him as a greedy corporate
raider whose firm, Bain Capital, made large profits by throwing people out of
work.
In Tuesday's Republican debate, shortly before his returns were made public,
Romney offered up a defence.
"I pay
all the taxes that are legally required and not a dollar more," he said.
"I don't think you want someone as the candidate for president who pays
more taxes than he owes."
But he
recognised that it could be a political problem.
"You'll
see how complicated taxes can be. And will there be discussion? Sure. Will it
be an article? Yeah. But is it entirely legal and fair? Absolutely. I'm proud
of the fact that I pay a lot of taxes," he said.
The returns
show Romney paid a smaller proportion of his income in tax than most Americans
because his income is from investments from his $200m-plus fortune, which
attract a lower rate than earned income.
In 2010,
Romney earned more than $21m and paid $3m in tax, a rate of less than 14%. He
expects to pay $3.2m in taxes on his 2011 income, a rate of 15.4%.
He and his
wife, Ann, donated $4.1m to the Mormon church and about $3m to other charitable
causes. The money given to a church that many on the Republican right do not
regard as Christian may not sit well with some voters.
Romney is
still refusing to release tax returns for earlier years, leading some critics
to speculate that he paid even less tax back then, before he knew he was going
to run again for president.
Newt
Gingrich revealed at the weekend that he paid nearly $1m in income tax, a rate
of about 31%.
The Obamas
had a joint income of $1.7m in 2010, much of it from sales of the president's
two popular books. They paid 26% in tax.
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