Romney to Release 2011 Tax Returns

New York TimesThe Caucus - The Politics and Government blog of The New York Times
September 21, 2012, 1:56 pm101 Comments

Romney to Release 2011 Tax Returns

By MICHAEL D. SHEAR

Mitt Romney paid $1.95 million in taxes on his 2011 investment income of $13.7 million, his campaign revealed on Friday, saying it will make good this afternoon on Mr. Romney’s promise earlier this year to eventually release his full returns for that year.

Mr. Romney, who made millions by running Bain Capital, a private equity firm, paid an effective federal tax rate of 14.1 percent in taxes, the campaign said, primarily because most of his income was in the form of capital gains that are taxed at a lower rate than ordinary income. Mr. Romney has said that he has paid at least 13 percent in federal income taxes in each of the last 10 years.

In order for that claim to be true in 2011, Mr. Romney had to voluntarily take a smaller deduction than he was entitled to for his charitable deductions, his advisers said Friday.

The campaign said Mr. Romney and his wife, Ann, donated about $4 million to charity in 2011, but claimed only $2.25 million as a deduction. The campaign said that Mr. Romney’s tax liability would have been far lower in 2011 had the Romney’s claimed all the full deduction for their charitable contributions.

“The Romneys thus limited their deduction of charitable contributions to conform to the Governor’s statement in August, based upon the January estimate of income, that he paid at least 13 percent in income taxes in each of the last 10 years,” said R. Bradford Malt, Mr. Romney’s trust.

It is possible, however, that Mr. Rommey could still deduct the unclaimed amount of his charitable donations in future tax years, experts said.

The Republican presidential nominee, who released his 2010 tax returns in January, continues to refuse demands from President Obama’s campaign and other Democrats to release multiple years of his returns. Mr. Obama has sought to portray Mr. Romney as an out-of-touch millionaire who used off-shore accounts and accounting gimmicks to reduce his tax liability.

But Mr. Romney’s lawyer said on the campaign’s Web site that the candidate will release a letter later today from his tax advisers providing a summary of his tax liability for a 20-year period from 1990 to 2009. The campaign said the summary will show that Mr. Romney paid taxes every year during that period, that the lowest annual federal tax rate was 13.66 percent and that the Romneys gave an average of 13.45 percent of their income to charity during the period.

The campaign provided the numbers in a blog post and said it will release the entire tax return and all of the supporting documents at 3 p.m. Friday afternoon.

For months during the Republican primaries, Mr. Romney refused to release any information about the taxes that he had paid, saying the information was not relevant despite a tradition of disclosure by presidential candidates that dates to his father’s 1968 bid for the presidency. George W. Romney released 12 years of returns.

In April, under pressure from his Republican rivals for the nomination and Democratic critics, Mr. Romney had estimated he would owe about $3.2 million in taxes on about $20.9 million in income during 2011. At the time, he promised to release the full returns before Election Day.

His decision to release the of tax documents on a Friday afternoon could help his campaign minimize news coverage of them. Politicians often try to release potentially damaging information just before a weekend, when voters are often paying less attention to their televisions and newspapers.

In spite of the timing, the release of the tax return is almost certain to rekindle the discussion about Mr. Romney’s personal wealth and Democratic attacks that his aggressive use of legal tax avoidance techniques sets him apart from average Americans.

In an Obama television ad, a narrator mentions tax havens, offshore accounts and carried interest and then says: “Makes you wonder if some years he paid any taxes at all. We don’t know because Romney has released just one full year of his tax returns.”

Democrats have sought to link Mr. Romney’s personal tax returns to the tax policies he would pursue if he were elected president. Mr. Obama argues that Mr. Romney’s tax policies are designed to provide tax cuts to wealthy people, which would lead to tax increases for middle-class citizens.

“Governor Romney’s tax plan would actually raise taxes on middle-class families with children by an average of $2,000,” Mr. Obama said last month at an event in New Hampshire. “Not to reduce the deficit, or grow jobs, or invest in education — but to give another tax cut to people like him.”

At a rally in Cincinnati earlier this week, Mr. Obama mocked the complexity of Mr. Romney’s tax returns.

“I’ve actually done my own taxes,” Mr. Obama said. “I don’t know about some of these other folks, but I’ve done them, you know… So I know we can make it more simple and more fair.”

Mr. Romney’s campaign has argued that his personal wealth is not relevant to the broader debate about who is best able to lead the country out of a sluggish economy.

Last month, Mr. Romney said the continued focus on his personal tax returns by his Democratic opponents and the news media was “small-minded” in light of the economic problems that the country faces. His wife, Ann, has said the campaign was resisting a disclosure that would go back years because opponents would use the information against Mr. Romney.

“The more we get attacked, the more we get questioned, the more we get pushed,” Mrs. Romney said in an interview on NBC’s “Rock Center” last month. “There’s going to be no more tax releases given. Mitt is honest. His integrity is just golden.”

But Mr. Romney had little choice but to release the full details of his 2011 tax returns, having promised to do so earlier in the year.

The campaign also said on Friday that it would be posting letters from Mr. Romney’s doctor and the doctor for his running mate, Representative Paul D. Ryan of Wisconsin. The letters will make public “their current state of health,” the campaign said.

Author: AFGE Local 704

Representing over 900 bargaining unit employees working at the U.S. EPA Region 5 Offices in Chicago, Ann Arbor, MI and Westlake, OH.

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