Romney Tax Returns Leaves Many Questions
MIAMI (CBSMiami) – Republican presidential candidate Mitt Romney finally released his 2010 tax return and it brought about increased scrutiny as a majority of Americans become increasingly worried about the growing wealth gap in the country.
In 2010, Romney paid about $3 million in federal income taxes, having earned more than seven times that from his investments. Those earnings, $21.7 million, put him among the wealthiest of American taxpayers.
Romney gave nearly $3 million to charity, which helped lower his effective tax rate to a modest 13.9 percent. About half of the amount given to charity went to the Mormon Church.
"The whole fact that he pays less taxes is ridiculous," said voter Eddie Vera.
But fellow voter K.B. Collins disagrees.
"I think everyone should pay their portion and if he's within the tax guidelines, there's no apparent reason to go after him for that," Collins said.
For 2011, he'll pay about $3.2 million with an effective tax rate of about 15.4 percent, the campaign said. Those returns haven't yet been filed yet with the Internal Revenue Service.
Romney had been called out about his income taxes by fellow GOP primary candidates Newt Gingrich and Rick Santorum, along with the Democratic National Committee. Republicans had been trying to quell the criticism from Gingrich, saying his message aligned too much with President Obama.
Compared with John McCain and Barack Obama in 2006, Romney paid less than half of what either of the 2008 nominees paid.
Gingrich made his returns public on Saturday and it showed he paid almost $1 million in income taxes — a tax rate of about 31 percent.
Romney's 2010 returns show the candidate is among the top 1 percent of taxpayers. The returns showed about $4.5 million in itemized deductions, including $1.5 million to the Church of Jesus Christ of Latter-Day Saints.
Before the tax records were released, Romney's old investments in two government-backed housing lenders stirred up new questions at the same time his campaign targeted Gingrich for his work for Freddie Mac.
Gingrich earned $1.6 million in consulting fees from Freddie Mac. Romney has as much as $500,000 invested in the U.S.-backed lender and its sister entity, Fannie Mae.
The fight over releasing the tax information highlighted an argument that Democrats are already starting to use against Romney — that he is out-of-touch with normal Americans. And it probably hurt him in the South Carolina primary, where he lost by 12 percentage points to Gingrich after spending several days resisting releasing the returns.
Still, if Romney was hoping to quell the criticism over his effective tax rate and his overall wealth; Tuesday's release may not help him much.
The tax releases shone a spotlight on a fortune estimated at between $190 million and $250 million, and could raise questions about where he keeps his money and how he earns it.
For example, Romney keeps some of his personal fortune in investments that are domiciled in the Cayman Islands, where many international investors shelter their income from American taxes. Romney aides say he doesn't use the funds to avoid or put off paying the appropriate taxes.
The returns could also reveal more details about his annual take as founder of the Bain Capital private equity firm.
But it's clear that Romney's campaign is bracing for an onslaught of criticism of his personal fortune. His wife, Ann, has started talking about the returns during campaign appearances. She told supporters at a Florida rally Sunday: "I want to remind you where we know our riches are. Our riches are with our families."
Most of Romney's vast fortune is held in a blind trust that he doesn't control. A portion is held in a retirement account.
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