Washington: Republican presidential candidate Mitt Romney released tax records on Tuesday indicating he will pay $6.2 million in taxes on a total of $42.5 million in income over the years 2010 and 2011.
Bowing to increasing political pressure to provide more detail about his vast wealth, the former private equity executive released tax returns indicating he and his wife, Ann, paid an effective tax rate of 13.9 percent in 2010. They expect to pay a 15.4 percent rate when they file their returns for 2011.
Romney`s tax rate is below that of most wage-earning Americans because most of his income, as outlined in more than 500 pages of tax documents, flows from capital gains on investments.
Under the US tax code, capital gains are taxed at 15 percent, compared with a top tax rate of 35 percent for wage earners.
Romney released the tax returns after a week in which his chief rival for the Republican presidential nomination, former House of Representatives Speaker Newt Gingrich, questioned whether Romney was hiding information about his finances and cast him as being out of touch with most Americans.
Gingrich`s attacks on Romney helped him upset the former Massachusetts governor in the South Carolina primary on Saturday.
Since then, Romney has vowed to be more aggressive in returning fire.
He has launched a series of attacks questioning Gingrich`s character, judgment and lucrative work as a Washington consultant, and released his tax returns to try to nullify Gingrich`s criticisms on that front.
The tax rates Romney reported paying could add fuel to a national debate over the fairness of the tax code, and coincides with broader concerns about income inequality symbolized by the Occupy Wall Street movement.
Romney`s campaign officials stressed that his tax rate is based mostly on income from investments that are held in a blind trust. Romney`s holdings include an undisclosed amount in funds based in the Grand Cayman Islands and other overseas entities.
Romney advisers stressed that the holdings in the Caymans - along with those in a Swiss bank account that was closed in 2010 after an investment adviser decided it could be politically embarrassing to Romney - were reported on tax returns and were not vehicles to avoid taxes.
They also stressed that Romney, whose holdings are in three blind trusts, makes no decisions as to how his money is invested.
Regardless, the emerging picture was of a man of great means who contributes mightily to charity. The documents showed he and his wife contributed $7 million in charity over the two years, much of it going to his Mormon church. That represents more than 15 percent of the Romneys` income for those years.
Romney, whose estimated net worth is $190 million to $250 million, is among the wealthiest Americans ever to seek the presidency.
Top campaign officials and the director of Romney`s blind trust, Brad Malt, briefed Reuters on the details ahead of a more general release of the information Tuesday morning.
Campaign counsel Ben Ginsberg, asked why Romney was not releasing tax records for the years in the 1980s and 1990s in which Romney made his fortune at private equity firm Bain Capital, said the two years covered by the tax returns should give a broad picture of Romney`s financial situation.
"We`re not going to get into the game of once you give them something, they demand more," Ginsberg said. "This is a fulsome release and we`re proud of it."
The tax issue may have been a factor in Romney`s loss to Gingrich in South Carolina. It became a distraction to Romney`s campaign, and Romney`s fuzzy answers on when and if he would release his records aggravated the problem.
First he said he might release them, or might not. When the questions kept coming, he said he would put them out in April, after his 2011 forms were completed. Only after he was defeated in South Carolina did his aides say he would release them this week. Gingrich has released his returns for 2010, but has not released an estimate for last year, as Romney did.
Long considered the front-runner for the 2012 Republican presidential nomination, Romney was staggered by Gingrich`s lopsided win in South Carolina, and is looking to regain enough momentum to defeat Gingrich in Florida, which votes on January 31.