Republican US presidential candidate Mitt Romney bowed to political pressure and cracked the books on his personal finances Tuesday,releasing tax returns showing he will pay $6.2 million in taxes on $42.5 million in combined 2010 and 2011 income.
Unlike most Americans who earn a paycheck,Romney gets the majority of his income from investment profits,dividends and interest. One of the wealthiest men ever to run for the White House,he made his fortune buying and selling firms as a private equity financier with Bain Capital.
Romney and his wife paid an effective tax rate of 13.9 per cent in 2010 and expect to pay a 15.4 per cent effective tax rate when they file their returns for 2011.
Those rates are roughly in line with the effective tax rates paid by most Americans,but they are far below the top income tax rate levied against wages,which is 35 per cent,because the US tax code favours investment income over wage income. Romney released the tax returns after a week when his chief rival for the Republican presidential nomination,former House of Representatives Speaker Newt Gingrich,questioned whether he was hiding information about his finances.
Romneys estimated net worth is $190 million to $250 million.
Romney campaign officials said his holdings include amounts in funds based in the Cayman Islands and other overseas entities. The Caymans holdings and holdings in a Swiss bank account which was closed in 2010 after an adviser decided it could be politically embarrassing to Romney were reported on tax returns and were not vehicles to avoid taxes,the advisers said.