by InvestorPlace Staff | September 24, 2012 6:53 pm
Romney finally took steps to stem criticism about his tax returns, releasing his 2011 tax returns on Friday.
According to his returns, he paid $1.9 million in taxes on $13.7 million in income, an effective tax rate of 14.1%. However, Romney could have easily paid even less. The Romneys donated $4.02 million in 2011, and if they had taken all of the available deductions on that amount, they could have easily paid an effective tax rate of 10.4%.
How much more did Romney pay than he needed? About $500,000.
His tax returns both support and contradict what he has said previously about them. They support Romney’s previously stated estimate in August that he paid an effective tax rate of 13.6%. However, Romney previously pledged on two occasions he would not pay more taxes than were legally required.
In addition, Romney’s campaign released a summary of the past 20 years of his tax returns. His accounting firm, PricewaterhouseCoopers, revealed in a letter that his average annual effective federal tax rate from 1990-2009 was 20.2%, and he never paid less than 13.7% in taxes for a year.
This release will quiet some, but not all, of the criticism Romney has faced over his taxes. It directly contradicts Sen. Majority Leader Harry Reid, D-Nev., who said he had heard Romney had paid no taxes for the last ten years. Given the fact that he did pay taxes in 2011 and 2010, that statement is demonstrably false. However, the way Romney danced around releasing his tax returns, the low rate he has been taxed at, and the size of his contributions to the Mormon Church has given plenty of ammo to his critics.
In fact, Romney has released his 2011 returns much later than typical for presidential candidates. The reason? He says it’s because the Mormon Church doesn’t typically publish how much people give to it, and he was hesitant to make that information public. According to an interview he gave to Parade magazine:
“One of the downsides of releasing one’s ﬁnancial information is that this is now all public, but we had never intended our contributions to be known. It’s a very personal thing between ourselves and our church.”
– Benjamin Nanamaker, InvestorPolitics Editor
The opinions contained in this column are solely those of the writer.
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