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Mitt Romney, under pressure from his GOP presidential rivals, revealed this week that he paid an effective tax rate of around 15 percent in 2010 -- a rate that's considerably below what's paid by many ordinary working Americans.
It's well-known that Romney accumulated a vast fortune while at Bain Capital, the private equity firm he worked at from 1984 to 1999, but many observers are curious to learn the details of a candidate who's bidding to lead a country still reeling from a major economic shock and struggling to create jobs.
Romney refuses to release his 2010 income tax forms until April, when the Republican presidential nominating contest will likely effectively be over. New Jersey Gov. Chris Christie, a Republican ally who's stumped for Romney's campaign this year, said Romney should be more transparent about his income taxes.
"What I would say to Gov. Romney is, if you have tax returns to put out, you should put them out. You should put them out sooner rather than later because it's always better to have full disclosure, especially if you're the front runner," Christie said Wednesday on NBC's "Today" show.
Romney has never released his tax returns, according to an article in Thursday's New York Times. The former Massachusetts governor pays an income tax rate applied to longer-term capital gains, as opposed to the typical rate of up to 35 percent many Americans pay every year. Hedge fund managers and investors pay a reduced levy because so much of their income comes from interest and dividends, not wages and salaries. Billionaire investor Warren Buffett has been an outspoken advocate of reforming the tax code, pointing out that he pays a lower federal tax rate than his secretary does.
Romney's presidential GOP opponent Newt Gingrich immediately advertised his own tax information to the press, noting that he paid a 31% federal rate on all income in 2010. Gingrich said he would also release his tax returns for 2010 this week. Gingrich and Romney will compete in a debate Thursday night before Saturday's South Carolina primary. (Texas governor and presidential candidate Rick Perry announced he was dropping out of the race Thursday and gave his support to Gingrich.)
What irked most people about Romney's announcement Tuesday was his comment about the money he's made in speaker fees.
"I got a little bit of income from my book, but I gave that all away," he said Tuesday in South Carolina. "And I get speaker fees from time to time, but not very much."
Romney's candidate disclosure forms show that "not very much" is in actuality $347,327 -- a sum he earned from February 2010 to February 2011.
"He's tone deaf," says William Cohan, a former investment banker and author of "Money and Power: How Goldman Sachs Came to Rule the World."
President Barack Obama revealed that he and his wife paid an effective tax rate of 25.3% in 2010, based on income of $1.8 million.
