Romney Pays Millions in Taxes, More to Charity

Tax returns show Romney is worth millions, paid $3 million in taxes

Published January 24, 2012 | The Wall Street Journal

GOP presidential candidate Mitt Romney paid a 14% effective income tax rate in 2010 after making $3 million in tax-deductible charitable donations and drawing most of his income from investments, according to a summary of Mr. Romney's 2010 tax form provided by his campaign.

Mr. Romney reported $21.7 million in income. He paid $3 million in federal taxes, slightly more than the $2.98 million he made in charitable donations. At least $1.5 million of his charitable donations went to the Mormon Church.

Of Mr. Romney's 2010 income, he noted a capital gain of $12.6 million, taxable interest of $3.3 million, ordinary dividends of $4.9 million and smaller sums of gains and losses on business income, refunds and other income.

Mitt Romney addresses the release of his tax returns and describes his plan for tax reform in this clip from the Republican Presidential debate courtesy of NBC.

His 2010 return also showed that he had a financial account in Switzerland that was closed in 2010 and that he generated income from overseas investments. He also reported financial accounts in Bermuda and the Cayman Islands.

Mr. Romney's campaign plans to release his full tax filings for 2010 and an estimate for his 2011 taxes Tuesday. Late Monday, the campaign provided the Wall Street Journal with a preview of those forms.

In an estimate of his 2011 taxes, the Romney campaign said Mr. Romney would pay $3.23 million in federal tax on $20.9 million in total income. He said he would have itemized deductions of $5.7 million, including $4 million in charitable donations. About $2.6 million of the money that Mr. Romney gave to charity in 2011 went to the Mormon Church.

Democrats and Mr. Romney's GOP rivals have long called on the candidate to release his tax forms. During the Republican debate Monday night, after previously resisting, Mr. Romney said that he will make public two years of tax releases and no more. He said two years of forms "will satisfy the interest of the American people."

"I pay all the taxes that are legally required, not a dollar more," he said. "I'm proud of the fact that I pay a lot of taxes." His tax bill is significantly higher than the amount paid by most Americans.

The release of the tax information is unlikely to end a problem that has dogged Mr. Romney on the campaign trail. Rich Galen, a Republican strategist who used to advise Mr. Gingrich, said the Romney release puts him ahead of his rivals' disclosure, "so the number of years isn't the issue; the issue will be the sophisticated use of the existing tax code."

Mr. Romney, who would be one of the richest GOP nominees in history, has stumbled at times when he has tried to show sympathy for struggling Americans. He has joked about being unemployed and recently said he feared getting a pink slip early in his career. In his 2008 run for the nomination, the issue didn't register. Today, his rate has become a proxy for a broader debate about how to revamp the U.S. tax code.

Of Mr. Romney's $21.7 million in 2010 income, he noted a capital gain of $12.6 million, taxable interest of $3.3 million, ordinary dividends of $4.9 million and qualified dividends of $3.3 million. His 2010 tax return indicated he had a "bank account, security account or other financial account" in Switzerland. That account was closed in 2010, aides to Mr. Romney said. It was not clear whether Mr. Romney received any income in 2010 from the Swiss account.

He reported gross income from "various countries" of $1.5 million. He filed more than one Form 8621, which are used for interests in offshore corporations, and at least one Form 8865, for an interest in an offshore partnership.

Mr. Romney received about $500,000 in "author/speaking" fees, according to his tax filing.

The 2010 tax filing lists Mr. Romney's occupation as "executive" and his wife, Ann, is listed as a "homemaker." The address listed is in Belmont, Mass.

The former Massachusetts governor told reporters last week he pays a roughly 15% tax rate because most of his income results from investments, not a salary. The top rate on Income from long-term capital gains and dividends is typically is 15%, considerably less than the top rate of 35% levied on regular salary income.

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